Is the era of gigantic financial institutions deemed too-big-to-fail over? According to FBN, executives at Bank of America (BAC) are coming under increasing pressure to downsize the firm as federal regulators seek to limit the size and complexity of corporate giants so that in the future any collapse wouldn’t damage the broader economy.
Like Citigroup (C), BofA was deemed too big to fail two years ago, and got extraordinary taxpayer assistance after inheriting billions of dollars in losses form Merrill’s acquisition that nearly pushed the entire entity into insolvency.
But while Citigroup has announced a plan to downsize its operations – such as the sale of its Smith Barney brokerage unit over time to Morgan Stanley (MS) — BofA hasn’t said it’s prepared to embark on a similar plan even though the regulators have made it clear to the firm’s executives that they are not comfortable with size of the company.
Here is Charlie Gasparino with more on the subject:
