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UBS has compared notes with Barclays about the US mortgage bond mis-selling scandal and is considering following the UK bank’s example and refusing to settle with the Department of Justice.
Barclays caused a stir in late December when it became the first bank to say that it would not settle with the DoJ over allegations it had missold mortgage bonds because the amount the DoJ demanded was not proportionate to the sums other banks settled for.
Around the same time, Deutsche Bank and Credit Suisse agreed to settlements totaling $12.5bn.
People familiar with UBS’s thinking said that the Swiss bank had been inspired by Barclays’ approach, and was considering taking a similar line if it could not reach an appropriate settlement. UBS declined to comment.
Not paying a fine now and instead going to court in a few years would help the bank to conserve cash in the short term and could make it easier to pay dividends.
The people stressed that no decision had been taken, and that any decision would ultimately depend on the DoJ’s final demand.
Both sides have been haggling over the number for several months, but discussions are effectively on hold now, the people said, as the DoJ works out its strategy in light of Donald Trump’s new US administration.