Germany’s biggest bank says it won’t pay a $14 billion US Department of Justice (DoJ) fine for selling mortgage-backed securities that contributed to the 2008 financial crisis.
Advertisement
But the German firm said it had “no intent to settle these potential civil claims anywhere near the number cited”.
In response to the latest settlement proposed by the US DoJ, Deutsche Bank has confirmed that it has begun negotiations with the federal agency. The German bank expects a negotiated outcome that is in the range of its competitors, which have already agreed with the US Justice Department to significantly lower amounts, ” it added. That figure is lower than similar settlements reached with other banks, like Goldman Sachs, which paid billion in April.
LONDON, Sept 16 Britain’s top share index fell on Friday to record a second straight week of losses as heavyweight bank stocks dropped after USA regulators demanded $14 billion from Deutsche Bank to settle claims over misselling mortgage-backed bonds.
Deutsche’s USA -listed shares were down 9 percent.
Deutsche Bank AG (NYSE:DB) stock traded down 6.78% in after-market hours on Thursday and is down 7.45% in pre-market trading today as of 5:46 AM EDT.
Deutsche Bank’s share price dropped as much as 8% this morning.
USA stocks were lower Friday afternoon as the possibility of a $14 billion fine against Deutsche Bank weighed on financial stocks, especially on the big Wall Street banks.
“The negotiations are only the beginning”.
Claims filed by individuals, companies and regulators against the banks accused them of misleading investors about the quality of their loans.
The US Justice Department declined to comment.
The resultant losses suffered by investors, along with foreclosures across the United States, formed one of the triggers for the financial crisis.
And it is not just the nightmare legacy issues that are dragging the bank down, as the prevailing ultra-low interest rate environment continues to crimp the bank’s ability to generate a decent margin between borrowing and lending money. Other banks which settled recently include Bank of America, Citigroup and JP Morgan. In 2014, Bank of America settled their probe with almost $17 billion. He has said the bank is determined to clear up its legal problems but has stressed that the matters are not fully in the bank’s control.
Advertisement
Deutsche Bank has raised 31.7 billion euros through in three capital increases since the global financial crisis erupted and was among the worst-capitalized lenders in European stress tests earlier this year. The bank ended up paying $7 billion.
