Bank of America (NYSE: BAC) executives including Chief Executive Brian Moynihan has been told by regulators that the largest U.S. bank in terms of assets must become “much smaller” in a similar manner to Citigroup’s (NYSE: C) shedding of non-core assets, reported Fox Business Network’s Charlie Gasparino on Wednesday.
Federal regulators are becoming increasingly concerned about what will happen if a second financial crisis occurs and wants to avoid having to bailout financial institutions for a second time. The new focus on Bank of America hopes to shed the risk of the company being “too big to fail” according to the Fox Business Report.
The new regulatory focus on Bank of America comes as Citigroup (NYSE: C) now the third-largest U.S. bank, has announced significant plans to shrink the company, and has already shed hundreds of billions of dollars worth of assets since 2007.
Bank of America had $2.2 trillion worth of assets as of the end of 2009, according to the company’s fourth quarter earnings report.
Any plans to shrink Bank of America would be complicated by what assets the company could sell.
Earlier in the day, Moynihan told investors and analysts at the Citigroup Financial Services Conference that the company has the ability to grow in the future and that it would only divest smaller non-core business units in the coming motnhs.
