Friday, May 4, 2012

Downgrade could force BofA to put up more collateral

Welcome to the morning roundup. Here's a look at what's news in banking and finance.

Downgrade damage. Bank of America could have to put up $5 billion more collateral if its debt rating is ratcheted down two notches, the bank reported in its quarterly filing, according to Forbes. Moody's has been reviewing major banks for the past few months, with the results expected soon.

Broker deal. Former Merrill Lynch brokers who say they are owed deferred compensation after leaving the company after its acquisition by Bank of America could get a settlement worth hundreds of millions of dollars, the Wall Street Journal reports. Bank attorneys have been meeting with representatives of the brokers.

AG review. New York and Delaware's attorneys general have announced an investigation into claims that several banks did not properly bundle loans into securities, Bloomberg reports. Investors say the errors make it more difficult for them to recover money on defaults.

Small fish may get bite of Facebook. As Facebook prepares for its IPO, executives are considering making more shares available to retail investors instead of big Wall Street banks, The New York Times reports. Smaller investors could end up getting 20 to 25 percent of the shares.