Fat, Drunk, and Stupid Bank of America is on Double-Secret Probation
Further down in the news from Paulson testifying about pressuring B of A, JPMorgan's earnings, and CIT's problems is the revelation that Bank of America is basically on double-secret probation. Its frat brother Citi is as well.
Courtesy of the WSJ:
Bank of America Corp. is operating under a secret regulatory sanction that requires it to overhaul its board and address perceived problems with risk and liquidity management, according to people familiar with the situation.
Rarely disclosed publicly, the so-called memorandum of understanding gives banks a chance to work out their problems without the glare of outside attention. Financial institutions that fail to address deficiencies can be slapped with harsher penalties that include a publicly announced cease-and-desist order.
Citigroup Inc. has been operating since last year under a similar order with the Office of the Comptroller of the Currency, according to people familiar with the matter. The company recently has been negotiating with the Federal Deposit Insurance Corp. about entering into a similar agreement with that agency, these people say.
- Anand (who thinks this situation absolutely requires a really futile and stupid gesture be done on somebody's part...and that person is Ken Lewis)