B of A Doesn't Have Money It Thought It Had

April 30th, 2014
in econ_news

Econintersect:  Bank of America has lost some money it thought it had in the form of "certain structured notes assumed in the Merrill Lynch & Co., Inc. acquisition in 2009".  So it seems they never really had the money at all, just an accounting for value that was incorrect.  The amount of the miscalculation is not reported* in the press release from B of A, but they describe the effect on previously provided capital ratios.  These have been reduced by 5, 12, 21 and 21 basis points for four specified capital ratios.


Follow up:

The reductions seem small.  For example, the total capital ratio was reduced from 15% to 14.8% and the estimated Basel 3 Standardized transition common equity tier 1 ratio was reduced from 11.85% to 11.80%.  These changes are quite significant, however, and caused the company to suspend announced stock buybacks and dividend increases.  They will be resubmitting their 2014 stress test capital plan, as well.

Click on page image below to read entire Bank of America press release:


*It is $4 billion according to Peter Eaves and Michael Corkery (The New York Times):  Bank of America Finds a Mistake: $4 Billion Less Capital



Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

 navigate econintersect.com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved