NEW YORK (

TheStreet

) --

Bank of America

(BAC) - Get Report

presents a "grave threat" to the U.S. economy and should be split up into smaller banks, according to Public Citizen, a nonprofit consumer advocacy organization based in Washington D.C.

The group sent a petition to the

Federal Reserve

and a separate letter to financial regulators calling for them to investigate the stability of Bank of America and "several other large and complex financial institutions, to analyze potential outcomes in the event of a failure, and to take any actions necessary to ensure systemic stability."

The letter was signed by prominent banking industry critics such as Dean Baker, co-director of the Center for Economic and Policy Research in Washington, DC, and William Black, professor at the University of Missouri-Kansas City School of Law and a former banking regulator.

Public Citizen argues Bank of America is "too complex to manage or regulate properly," and that "potential liabilities and market risks" such as pending litigation against the bank and its exposure to Europe, "could severely destabilize it."

Bank of America is widely seen as having strengthened its balance sheet in recent months by selling off assets. Its Basel I Tier 1 common equity ratio increased from 8.65% to 9.86%, which Oppenheimer analyst Chris Kotowski called "a large increase that takes them much closer to the group average of 10.47%," in a recent report.

A Bank of America spokesman declined to comment.

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Written by Dan Freed in New York

.

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