Nomura Holdings Inc. and Royal Bank of Scotland Group Plc helped fuel a bubble that led to the collapse of the U.S. housing market, an attorney for the Federal Housing Finance Agency said at the opening of a trial over defective mortgage-backed securities.

"Nomura and RBS were very willing participants in creating the worst financial crisis in the U.S. since the Great Depression," Philippe Z. Selendy, a lawyer with Quinn Emanuel Urquhart & Sullivan LLP representsing the FHFA, said in U.S. District Court in Manhattan Monday.

The FHFA, suing on behalf of government-owned Fannie Mae and Freddie Mac, claims Nomura sold them $2 billion of bonds backed by faulty mortgages. The agency seeks more than $1 billion in damages in the trial, which began today before U.S. District Judge Denise Cote.

Nomura, the Tokyo-based investment bank, is choosing to fight claims that 16 other banks settled after the blow-up of toxic mortgage bonds led to the global credit crunch. FHFA has reached $17.9 billion in settlements from banks including Bank of America Corp., JPMorgan Chase & Co. and Goldman Sachs & Co.

If Nomura prevails at trial, it may embolden other firms facing mortgage-related suits to defend themselves rather than settle.

Royal Bank of Scotland Group Plc, a co-defendant, underwrote three of the seven securitizations at issue in the trial.

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