In the video below, Bill Black discusses the issues he raised in a recent post about Bank of America’s accounting activities. At issue is the effect of its shift of assets from the holding company to its FDIC-insured subsidiary. Overall, Bank of America owns derivative assets with a notional value of $75 trillion. The Federal Reserve authorised this accounting manoeuvre despite FDIC objections. If Bank of America were to fail, this action will put the deposit-taking institution at much greater risk.
Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.