RBS to pay US$5.5bn for misselling of mortgage backed securities

Royal Bank of Scotland (RBS) has been fined US$5.5bn (£4.2bn) in the US for misselling residential mortgage backed securities (RMBS) in the period preceding the 2008 global financial crisis.

Ross McEwan, the bank’s chief executive, commented: “This settlement is a stark reminder of what happened to this bank before the financial crisis, and the heavy price paid for its pursuit of global ambitions.

“Today’s announcement is an important step forward in resolving one of the most significant legacy matters facing RBS and is further evidence of the determination of the bank’s leadership to put our remaining issues behind us.”

The penalty, imposed by the Federal Housing Finance Agency, is one of several that the bank faces from US authorities over the sale of bonds with a potentially even heavier fine likely from the Department of Justice (DoJ). RBS has made a £6.6bn provision for misselling penalties.

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