麻豆约拍

Shareholders in Deutsche Bank will be relieved that the company has agreed to pay $7.2 billion to the United States to settle charges that it misled investors by selling toxic mortgage securities. The American authorities were originally seeking a penalty of double that size.

Credit Suisse has joined its German rival to settle with the US authorities, paying a penalty of more than $5.2 billion, which is likely to mean the bank will suffer a second consecutive annual loss.

Peter Hahn, Dean of the London Institute of Banking and Finance, explains why the European banking giants have decided to pay up, when Deutsche in particular opposed settling.

(Picture Deutsche Bank branch in Oberusel. Getty Images.)