Another day, another British bank fined billions of dollars for its past-life transgressions.

Moments ago Royal Bank of Scotland announced it has agreed to pay $5.5 billion to the U.S. Federal Housing Finance Agency to settle a probe into its sale of toxic mortgage-backed securities ahead of the financial crisis, part of what it says was a "heavy price" paid for over-expansion before the financial crisis. The settlement targets $32 billion in debt issued by housing agencies Fannie Mae and Freddie Mac.

"This settlement is a stark reminder of what happened to this bank before the financial crisis, and the heavy price paid for its pursuit of global ambitions" said RBS CEO Ross McEwan, adding that it was an "important step forward in resolving one of the most significant legacy matters facing RBS". There was some good news: RBS is eligible for a $754 million reimbursement under indemnification agreements with third parties.

According to the WSJ, RBS said in a statement that it had already set aside funds to cover most of the cost of the settlement. The 71% U.K. government owned bank will have to take an additional charge of $196 million which will be realized in its coming results in August.