Obama Administration scrambles to close similar cases before January
Obama administration has moved in to solve the crisis relating to banking mortgage cases as the current fiscal year is about to end. In a latest series a settlement has been reached by the government with Deutsche Bank AG (USA) (NYSE:DB) in this regard. The financial giant has agreed to pay a fine of a massive $7.2 billion over toxic securities.
The announcement shows that senior officials in the Department of Justice (DoJ) are scrambling to solve the cases before they leave offices by mid-January, next year. They are trying to settle the cases with major banks as the future of these probes is uncertain under the next administration. Donald Trump’s administration may wish to settle, pursue, or totally drop these cases altogether.
The settlement can be marked as a win for the German shareholders as DoJ earlier sought $14 billion; back then it seemed difficult to negotiate the amount down. The settlement will have a lower effect on its bottom line figures immediately as only half is required to be paid in cash. It has been divided into a $3.1 billion penalty along with a $4.1 billion pledge to a consumer relief fund, which will be distributed by the government.
The terms regarding the loan modification and the pledge are yet to be finalized between the two parties. The banking giant announced the settlement yesterday evening, saying that it has reached an agreement with DoJ. The settlement is similar to those that DoJ has made with other banking giants, such as J.P. Morgan Chase & Co., Citigroup Inc., and Goldman Sachs Group. Inc.
Deutsche Bank shares fell in the last session yesterday, losing 0.91% of their value and closing at a price of $18.54. The stock, as of 7:49 PM EST has started to recover as it has gained 0.32% and is trading at $18.60 in the after-market hours today