The Federal Reserve made the unusual request that Bank of America offer a contingency plan, according to a report by the Wall Street Journal, which cites people familiar with the situation.
Bank of America executives reportedly gave the central bank a list of options, which the issuance of a separate class of shares tied to the performance of its Merrill Lynch securities unit, sources told the Journal, although CEO Brian Moynihan isn't expected to make that move any time soon.
Both Bank of America and the Fed did not respond to requests for comment by the paper.The fresh scrutiny from the central bank is the latest headache for the largest bank in the U.S. Bank of America is seeking approval of its $8.5 billion mortgage settlement, which the FDIC has already objected to. Last week. U.S. Bancorp subsidiary U.S. Bank sued Bank of America over Countrywide loans. Bank of America has also made several moves recently to shore up capital. The bank struck a deal to sell preferred stock and warrants to billionaire investor Warren Buffett for $5 billion. Bank of America has also reportedly slashed its mortgage business and has also cut its China Construction Bank stake. -- Written by Robert Holmes in Boston.
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