Charting the billions banks have paid out over crisis-era mortgages

Jun 11, 2014 18:13 UTC

Another day, another potential Bank of America mortgage settlement. This time it could be up to $17 billion — the largest settlement by any bank. BofA, however, is finally putting its foot down. According to the New York Times, it doesn’t want to pay more than $12 billion.

The bank has paid out much more than any other bank over crisis-era mortgages. Here’s a Reuters chart showing how much it, JPMorgan, and Citi have paid so far:

bofa-mortgage

COMMENT

I bet BOA wishes they had never seen CountryWide as a good investment. . . . I’m not sure, but I believe they have now paid out more in penalties than they paid for the whole shebang!

Posted by Tomtherailnut | Report as abusive

Litigation risk is increasing for European banks

Jun 4, 2014 18:55 UTC

As it becomes more likely that the United States will be fining French bank BNP Paribas around $10 billion for evading US sanctions (over protests from French politicians), Credit Suisse’s (CS) banks research team released an updated estimate for litigation costs for major European banks (pdf). Things are looking less rosy 15 months later. The original estimate, from February 2013, was $58 billion in 38 areas of potential litigation for 10 European banks. CS now thinks these banks will end up paying $104 billion.

That's what skyrocketing litigation costs looks like

This is what Credit Suisse refers to as an “increasing headwind”. In other words, it’s going to costs the banks money. From the report:

Legacy litigation risk has become a primary factor in share-price performance. Our analysis indicates that since October 2013, European banking stocks with legacy litigation risks have underperformed by c25% vs those without. We expect this relative divergence to widen further.

(h/t Paul Murphy)

 

  • # Editors & Key Contributors