Bank of America $16.7bn settlement increased it's share price even though the bank's profit will decrease.

Bank of America and US authorities has reached to the settlement that it will pay $16.7bn (£10bn) to US authorities for misleading investors about the quality of loans it sold. The settlement will cut the bank's third-quarter profits by $5.3bn. The associate attorney general said "no institution is either too big or too powerful to escape" punishment.

On Wall Street, shares in Bank of America opened 1.5% higher following the settlement.

It is considered a historic step forward. The cash component consists of a $5 billion civil penalty and $4.63 billion in compensation payments.

Before Bank of America bought the loans in 2008, these loans were sold by Countrywide Financial and Merrill Lynch.

Much of which will go towards homeowners struggling with their mortgages and Bank of America will provide consumer relief worth about $7 billion and  pay a total of $9.65 billion in cash.

There is intense focus on Merrill Lynch selling mortgage loans to investors without explaining the full extent of the risk involved and Countrywide Financial lending biggest amount at the time of the crisis.

"We believe this settlement, which resolves significant remaining mortgage-related exposures, is in the best interests of our shareholders, and allows us to continue to focus on the future" Brian Moynihan, chief executive of the bank, said.

It's a step to hold Wall Street accountable for the bad conduct that led to the financial crisis. And the sums involved in Bank of America's settlement dwarf the $13bn paid by another banks, JP Morgan to resolve a similar matter. The penalty exceeds Bank of America's entire profits last year yet this deal brings a measure of closure. This settlement of bank was the biggest remaining hurdle of all cases. The bank has already paid tens of billions of dollars to settle cases related to the financial crisis.

Bank of America paid $9.5bn to settle charges that it misled US mortgage lenders Fannie Mae and Freddie Mac over mortgage securities, in March this year .

BYD's shares fell by more than 8%

On Monday, BYD's Shares  fell by more than 8% in Hong Kong trade after the firm posted worse than expected first half earnings. Its net profit for the six months to June this year fell by 15.5% to $58.6m (£35.3m). It did recovered later, but only by 2.24%.

"Due to the intense competition in the automobile market and the change of subsidy policy for energy-efficient automobiles, the market share of China's local brands has shrunken by 3.48 percentage points as compared with that of last year," the firm said.

In 2009, China's car market was the largest car market of the world. However, the Chinese government is trying to reduce the competition as and manufacturer to reduce the pollution. After the removal of subsidies for traditional car purchases, in mid-2010, sales growth started to decline.

BYD's  traditional fuel cars sales fell by 27% during the six months to June from a year earlier and due to continued slowdown in traditional car sales, the company expects weak third-quarter earnings. This increases the chance for further decline in share price.

Even though there's competition between domestic and foreign car manufacturers, the company said sales of its so-called new energy vehicles had grown compared to a year earlier.

BYD's overall first half revenue rose 4% from a year earlier.