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.
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,