Bank and Credit Suisse reached multi-billion-dollar settlements with the U.S. Department of Justice over their alleged selling of toxic mortgage backed securities (MBSs).

• Deutsche Bank: $7.2 billion package, consisting of a $3.1 billion civil fine and $4.1 billion in mortgage loan relief or forgiveness.
• Credit Suisse: $5.3 billion package, consisting of a $2.48 billion civil fine and $2.8 billion in mortgage loan relief or forgiveness.

The dramatic back-to-back announcements show the urgency among senior Obama appointees in the Justice Department to resolve the outstanding probes of pre-crisis conduct at major banks before those officials leave office in mid-January. Part of the rush stems from a great deal of uncertainty about how a Trump administration might pursue, settle or drop the remaining probes, according to people familiar with the discussions.

Crucially, it looks as if both banks can afford to pay these settlements without turning to shareholders for extra cash. Deutsche Bank could have afforded a fine of up to about $8 billion and Credit Suisse about $4 billion, by some estimates. Today's upfront civil penalties are well below that level, at $3.1 billion for Deutsche and $2.5 billion for Credit Suisse. This will mean some painful billion-dollar losses in the fourth quarter, but it could have been much worse.

For further details and accounts of the settlements, go to these publications:

Bloomberg:  “Deutsche Bank's Christmas Relief”

NYTimes:  "Deutsche Bank to Settle Mortgage Inquiry for $7.2 Billion"

  "Credit Suisse to Pay $5.3 Billion to Resolve Mortgage Inquiry"

Reuters:  "U.S. Hits Credit Suisse, Deutsche Bank with Toxic Debt Penalties"