Bank of America Corp is operating under a secret U.S. regulatory sanction that requires it to overhaul its board and address perceived problems with risk and liquidity management, The Wall Street Journal reported, citing people familiar with the situation.
Rarely disclosed publicly, the so-called memorandum of understanding (MOU) gives banks a chance to work out their problems without the glare of outside attention, the paper said.
Financial institutions that fail to address deficiencies can be slapped with harsher penalties that include a publicly announced cease-and-desist order, the newspaper said.
According to the paper, the order was imposed in early May, shortly after shareholders of the bank stripped Chief Executive Kenneth Lewis of his duties as chairman.
The MOU is the most serious procedural action taken against Bank Of America by federal regulators since the financial crisis erupted, the newspaper said.
The report said the MOU surprised some Bank Of America executives who had not expected federal regulators to issue such a formal rebuke. It said the bank responded swiftly with six directors resigning since May 26.
Bank of America faces a series of deadlines, some at the end of July and others in August, the paper said.
Bank of America could not be immediately reached for comment by Reuters.
Disclaimer: The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible for any inaccurate or incorrect statement in this article. The Centre of Research on Globalization grants permission to cross-post Global Research articles on community internet sites as long the source and copyright are acknowledged together with a hyperlink to the original Global Research article. For publication of Global Research articles in print or other forms including commercial internet sites, contact: [email protected]
www.globalresearch.ca contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the
copyright owner.
