Financial crisis bank fines hit record 10 years after market collapse
Since the outbreak of the financial crisis in 2007, financial institutions have paid more than Qatar’s GDP in fines for their wrongdoings. As investigations and lawsuits continue, that number is expected to grow, $150 billion (127.6 billion euros) – that’s how much US authorities have collected in fines from financial institutions for shady dealings with subprime mortgages since the beginning of the credit crisis in 2007, according to research by the British business daily Financial Times (FT).
The FT report comes on the 10th anniversary of the onset of the global financial crisis, which led to the Great Recession, whose profound societal, economical and political repercussions are still reverberating today. In the past 12 months alone, the American justice department fined three European big banks $19 billion. First, the US Department of Justice fined Deutsche Bank and Credit Suisse a combined $12.5 billions. And just last month, Royal Bank of Scotland agreed to a $5.5 billion settlement with the Federal Housing Finance Agency. Those three payments drove the sum total over the landmark figure of $150 billion since 2007.
Deutsche Bank’s $7.2 billion settlement to resolve its dealings in mortgage-backed securities is roughly a third of the entire amount it had to pay since the outbreak of the financial crisis. While the FT valued the bank fines at said $150 billion, a Boston Consulting Group (BCG) report said fines had added up to $321 billion. That number, however, includes penalties for crimes such as money laundering, terrorist financing, benchmark interest rate rigging and violating US sanction law. According to this calculation, European banks have paid back $118 billion, compared to $204 billion by US institutions.
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