CRI听力:Citi to Pay $7 bln to Settle US Mortgage Probe

Citigroup has agreed to pay 7-billion US dollars to settle a US federal investigation into risky sub-prime mortgages.

The US banking giant is among a number of US financial institutions accused of creating, what the US Justice Department describes as, "fraudulent securities backed by toxic loans" which triggered the financial crisis at the end of 2007.

US Attorney General Eric Holder.

"The bank's activities shattered lives and livelihoods throughout the country and also around the world. It contributed mightily to the financial crisis that devastated our economy in 2008."

Citigroup and a number of other banks created so-called Collateralized Debt Obligations, or CDO's, which securitized sub-prime mortgages in confusing packages traders then sold to investors.

A lack of government oversite of the CDO's eventually led to many of them failing, leading to insurance companies being unable to pay off their obligations.

This then triggered a systemic shut-down of the US markets not seen since the market crash of 1929.

With the fine, Citigroup has seen its second quarter net income drop by some 96-percent to less than 200 million US dollars.