On the other side of the ocean we are talking about subprime again. The US Justice Department and the SEC (the American Consob) have officially started a fraud lawsuit against Bank of America, accusing her of deceiving investors in 2008.
The institute would not disclose the risks associated with the sale of $850 million of mortgage-related securities. In particular, the institute allegedly failed to inform customers that over 70% of those products came from intermediaries outside the banking group and therefore were much more exposed to default risk. The lawsuit, in civil proceedings, was also filed against two affiliates of the American giant.
The Second Bank of the United States counters by stating that the securities in question were aimed at sophisticated investors and would even outperform those similar securities. “We are not responsible for the collapse of the real estate market”, the Bank says.
Meanwhile, Barack Obama he intervened in the ongoing debate in the United States on the reform of the financing system and on mortgage guarantees. According to the number one of the White House it is necessary to reduce public involvement and at the same time increase private capital.
The President believes it is necessary to reform the real estate market, because returning "to the system of the bubble destined to burst, which caused the financial crisis, is unacceptable". For Obama, first of all, it is necessary to "put an end to the era of bailouts for Fannie Mae and Freddie Mac", the two mortgage credit giants nationalized during the crisis.
