UBS has reached an agreement in principle in the US with the Federal Housing Finance Agency (FHFA) to settle claims that it mis-sold mortgage investments between 2004 and 2007.
Announcing its second quarter profits, the Swiss bank said that it has allocated 865m Swiss francs (CHF) to cover litigation, of which CHF100m relates to a deal with UK authorities to disclose details of British tax evaders and settle unpaid taxes.
UBS is one of 18 banks against which the FHFA has filed cases, as it seeks to recoup money owed to government-controlled housing giants Federal National Mortgage Association (aka Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac), which were taken into conservatorship in 2008 to prevent their collapse.
The FHFA alleged that UBS had misrepresented the quality of loans underlying around US$6.4bn of residential-mortgage-backed securities in which Fannie Mae and Freddie Mac had invested between September 2005 and August 2007, according to court documents released in April.
A recent Gallup poll found that respondents identified the 'economy in general' as their biggest concern.
Sentiment in the financial services sector deteriorated in the three months to September, as firms digested the challenges of lower interest rates and the uncertainty caused by the vote to leave the European Union (EU), according to the latest CBI/PwC Financial Services Survey.
However, a London summit on the industry’s introduction of the technology cautions that testing and acceptance are still at an early stage and firms should proceed with caution.
The proposals of both US presidential candidates could shake up operating conditions in several sectors, reports the credit ratings agency.