Credit Suisse asked to cough up US$5-7b in US settlement of toxic debt probe

Zurich

THE US Department of Justice has asked Credit Suisse to pay between US$5 billion and US$7 billion to settle a probe over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis, a source with knowledge of the matter said, but the bank has resisted settling for that amount.

The size of the suggested settlement indicates that the cost to the bank may be higher than analysts had expected and explains why Credit Suisse management, according to a second source, has been seeking a smaller penalty. "Credit Suisse is confident of reaching a better solution," said the second person. Should talks break down, US legal authorities could sue the bank, prolonging the uncertainty.