Treasury holds US talks in bid to agree multi-billion RBS mortgage mis-selling fine
The Treasury has held secret talks with US officials designed to strike a multi-billion deal on the pending fine hanging over Royal Bank of Scotland (RBS) in relation to its role in the mortgage scandal that resulted in the last financial crisis.
According to Sky News, officials from the Treasury were due to discuss earlier this week the progress of settlement negotiations between 72 per cent state-owned RBS and the US Department of Justice (DoJ) over the mis-selling of residential mortgage-backed securities (RMBS).
The broadcaster cites “a senior City insider”as confiming that the weekend discussions between the Treasury and US officials were aimed at expediting a final penalty for the bank, which some analysts predict could be higher than £5bn.
RBS has already set aside $3.3bn (£2.4bn) to cover the DoJ penalty, and last year paid $5.5bn (£4bn) to the Federal Housing Finance Agency (FHFA) in relation to the bank’s issuance and underwriting of $32bn of RMBS during the leadership of former boss Fred Goodwin.
One source said on Saturday that the Treasury’s intervention could lead to a deal with the DoJ being agreed within weeks, although the timing remains uncertain.