Credit Suisse to pay $495m in US to settle securities case

Credit Suisse said Monday it would pay $495 million to settle a row over mortgage-backed securities dating back to the 2008 financial crisis.

Switzerland’s second-biggest bank said it had agreed with New Jersey authorities to make the one-time payment... to fully resolve claims for compensation, and said it had already provisioned the amount.

In the claim filed in 2013, Credit Suisse was criticised for not having provided sufficient information on the risks relating to $10 billion of mortgage-backed securities.

Subprime mortgages, credit granted to borrowers often with poor credit histories or insufficient income, were packaged into financial products and sold to investors.

But as borrowers defaulted on many of those mortgages, investors had no way of telling what portions of the loans in the derivatives were bad.

Those products were at the heart of the 2008 financial crisis, which sparked a global recession and brought the international financial system to the brink of collapse.

Shares rose after the statement on the SMI, the flagship index of the Swiss Stock Exchange.