Stat of the day: £5bn

How much British banks could be forced to pay out in response to the US subprime mortgage scandal.

by
Last Updated: 09 Oct 2013
Not the best start to the week for Britain’s biggest banks: their shares headed south this morning amid fears of a lawsuit launched against them by the US. 

RBS and Barclays lost more than 7% after the Federal Housing Finance Agency (FHFA) filed a lawsuit against 17 banks alleging they sold risky home loans to US housing agencies Fannie Mae and Freddie Mac.

The lawsuit means RBS, HSBC and Barclays (the UK banks involved) could be forced to pay out more than £5bn in damages, according to reports. RBS denies the allegations, while HSBC and Barclays refused to comment. Coinciding with an Item Club report warning the financial services sector in the UK faces sluggish growth, the prospect of a £5bn fine’s the last thing the banks need on a Monday morning…

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today