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Last updated at 14:16 BST, Friday, 22 August 2014

US bank to pay record $16.7bn to government

Summary

22 August 2014

Bank of America has agreed to pay a record $16.7bn to US authorities for selling bad mortgage loans that helped start the 2008 financial crisis. The fine is the largest of its kind in US corporate history.

Reporter:

Michelle Fleury

Wall Street

This is the latest effort by US authorities to hold Wall Street responsible for the financial crisis

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Report

The agreement involving one of America's biggest banks settles a probe brought by the US Justice Department. It resolves lengthy wrangling over the extent to which Bank of America misled the buyers of its mortgage-backed investments.

This is the latest effort by authorities in the US to hold Wall Street accountable for the bad conduct that led to the financial crisis. And the sums involved here dwarf the $13bn paid by another bank, JP Morgan, to resolve a similar matter.

Even though the penalty exceeds Bank of America's entire profits last year, this deal brings a measure of closure. The bank has already paid tens of billions of dollars to settle cases related to the financial crisis, but this was seen as the biggest remaining legal hurdle.

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Vocabulary

settles

solves (a problem); reaches an agreement about

probe

investigation

wrangling

arguing

misled

made someone believe something that is not true

accountable

responsible

dwarf

are much larger than

closure

the feeling that something unpleasant has ended

hurdle

problem that must be solved

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