Credit Suisse will pay a $5.3 billion settlement over pre-crisis mortgage-backed securities

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Credit Suisse CEO Tidjane Thiam.
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REUTERS/Arnd Wiegmann

Credit Suisse formally agreed to pay $5.3 billion to settle with U.S. authorities over claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis, the U.S. Department of Justice said said on Wednesday.

Zurich-based Credit Suisse will pay a $2.48 billion cash penalty and provide $2.8 billion in consumer relief, the Justice Department said in a statement.

Credit Suisse had announced the agreement in principle on Dec. 23.

Credit Suisse will report fourth-quarter and full-year 2016 earnings on February 14.

Deutsche Bank on Tuesday agreed to pay a $7.2 billion settlement to US authorities over pre-crisis mortgage-backed securities.

A number of US firms made similar settlements in early 2016, including Goldman Sachs and Morgan Stanley.