Big banks could be forced to pay $50bn in federal probe

by Ryan Smith13 Jan 2014
Wall Street banks could end up paying almost $50bn to settle federal investigations into their roles in the mortgage meltdown, according to a New York Times report.

According to the Times, the banks are using JPMorgan’s record $13bn settlement as a benchmark to determine how much each lender might have to pay to put the government probes to rest.

According to an analysis, if settlements are made they could yield $15bn in consumer relief. The $50bn total figure would amount to about half of the total 2012 profit of American banks, the Times reported.

The Times reported that the analysis indicated that Bank of America might be looking at an $11.7bn penalty and an additional $5bn in consumer relief. Royal Bank of Scotland could be facing a penalty of $10bn, while Goldman Sachs may have to shell out $3.4bn. Morgan Stanley could be facing a $3bn price tag, while Citigroup may have to pay $1bn, according to the Times.

The projected $50bn price tag does not include JPMorgan’s $13bn settlement in November, the Times reported.


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