HSH Nordbank, one of Germany’s biggest banks, is suing UBS, over $US500m (£254m) of collateralised debt obligations (CDOs) in what lawyers say will probably be the first of many such cases in Europe.
The Times reports HSH is suing for losses of more than $US200m, accusing UBS of putting risky American mortgages instead of low-risk assets into a CDO which it sold to the German bank in 2002.
HSH plans to file a claim against UBS in a court in New York this month. According to lawyers, similar cases had been brought in the US but none as yet by a European investor.
One lawyer who specialises in CDOs said that smaller banks 'might be the next to have a go at this kind of suit'.
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