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Bank of America Corporation Message Board

  • informative2000 informative2000 Jul 18, 2011 9:15 AM Flag

    BAC-Capital Riase

    Attorney Genral lawsuit- potential $7B
    Investor lawsuit settlement- $8.5B
    BAC project future loses- $5B (will be revised higher for mortgage charges)
    Class action lawsuits not cover by settlement- $$Billions more

    Capital ratio fall below 4.7% according to the wallstreet journal. BAC is caught between a rock and a hard place. This is the same board who requested to pay a dividend, now will be forced to raise capital to stay above the required capital ratios.

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    • Your late, im posted this last week,

      along w Soc Gen and Bank Populaire, in europe
      failed stress test Tier I ratio of 5 %

      according to Whitney at 4.7% Tier I;

      without a downgrade in Gov US Treasuries and
      mortgage securities, its still below 5%

      huge dilution to raise Capital to be a too
      big to fail, FED Watch systemic Bank.

      capital should be 9% as systemic.

      it will have to sell huge parts off.

      5 $ a share or lower ANAL-ysts target if it loses Merrill Lynch in selloff for capital IMHO


      down to $3

    • Basel III is effective the end of 2012 and fully implemented by 2019.

      Here is a just a sample of what Basel III susgest-

      At first sight, the impact on US banks seems similar, though slightly smaller; of course, the US banking industry is also smaller than Europe’s, as measured by assets. Under the same assumptions, we estimate the shortfall in core Tier 1 capital in the United States at about $700 billion, or €500 billion at current exchange rates, and the total Tier 1 capital shortfall at $870 billion, or about €600 billion. We estimate the gap in long-term funding for the United States at $3.2 trillion, or €2.2 trillion. These shortfalls would affect profitability; the US banking industry would see a decrease in ROE of about 3 percentage points. The leverage ratio embodied in Basel III would not be a major additional constraint, as the United States already has a leverage ratio in place.

      This doesn't even take into account the systemic risk of the bond defaults for Greece, Spain, Italy,

    • Judging from Tier 1 reports as of now they are not going broke any time soon. I do believe that they will lose 50 billion in market share from now and December of this year.

    • wrmcnee Jul 18, 2011 9:18 AM Flag

      Re the Bloomberg recent article, they have until 2019 to raise the capital.

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