All that bluster in recent months from Bank of America about how it’s totally fine and everyone who says it isn’t is full of it?
Bank of America, it turns out, has been operating under an informal “memorandum of understanding” with its regulators for the past two years.
And Bank of America’s regulators recently told the company’s board that it has not fixed those problems and that, if the bank doesn’t fix them soon, it may be hit with a formal “enforcement action.”
Bank of America’s board disagrees with the regulators’ assessment, but its arguments are falling on deaf ears.
A formal enforcement action might require Bank of America to raise more capital or sell more assets. It has often been speculated that Bank of America will have to spin off Merrill Lynch. This would presumably be music to the ears of those at Merrill Lynch.