NEW YORK: Swiss banking giant Credit Suisse paid $600 million to financial guarantee insurer MBIA to settle long-running litigation connected to the US subprime mortgage crisis, MBIA announced Thursday.
The agreement follows a ruling by a New York judge in favor of MBIA in the case concerning Credit Suisse’s representations to the company, which provided insurance for residential-backed securities ahead of the 2008 financial crisis.
MBIA said the court dismissed the suit following the settlement. The original case was filed in 2009.
Credit Suisse on January 8 announced it was increasing by $850 million the provisions set aside for the MBIA case and others involving mortgage backed securities, leading to an expected fourth-quarter loss.
