Reuters news service is reporting that bond insurer MBIA has reached settlements in its lawsuit against the London branch of UBS.
MBIA’s problems stem from the real-estate bubble, during which many banks made dubious loans and securitized them. MBIA and other companies insured the securities. When the recession hit in 2008, real estate values plunged, unemployment spiked, and many home owners stopped making payments on their mortgages. The securities turned out to be worth far less than had been promised.