The Federal Reserve has asked Bank of America Corp. to lay out the measures it could take if the bank’s issues worsen, The Wall Street Journal reported on Friday.
The menu of options that Bank of America provided the Fed included a move to issue a separate class of shares tied to the performance of Bank of America’s Merrill Lynch securities division — currently the most profitable division of the struggling lender.
Bank of America CEO Brian Moynihan has tried to unify the two banking divisions since acquiring Merrill Lynch in 2008. Sources told The Journal that the so-called ‘Merrill Lynch tracking stock’ was a highly theoretical proposal.
Concern about the economic recovery and Bank of America’s struggling share prices prompted the Fed’s request, The Journal reported. Bank of America has struggled to turn a profit since the 2008 financial crash, and also faces mounting legal issues. Since the crash, the Fed has kept the lender on a tight leash.
Bank of America’s stock was down 41 percent for the year in Thursday's trading on the New York Stock Exchange, according to the newspaper report. Its stock-market value fell $16 billion in a single day last month.