Credit Suisse will pay $600 million to settle subprime case, says insurer MBIA


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.

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