US regulator puts two banks on trial

A US housing regulator is set to take two of the world’s biggest banks to trial on Monday to try to recoup more than $1bn (€955m) in damages over mortgage bonds sold to government-run mortgage finance companies ahead of the 2008 economic crisis.

Lawyers for the regulator will face off with attorneys of Nomura Holdings Inc and Royal Bank of Scotland Group Plc in a non-jury trial in Manhattan federal court, one of the few cases spilling out of the financial crisis by the US government to reach trial.

Barring a last-minute settlement, the trial would be the first to result from 18 lawsuits filed in 2011 by the Federal Housing Finance Agency (FHFA) to recover losses on some $200bn in mortgage-backed securities that various banks sold Fannie Mae and Freddie Mac.