Bank of America, where the trust is destroyed
Report to the U.S. Government holds the right to control the Bank of America (BoA) has stock market fermenting America. While the ability to “nationalize” BoA has been Chairman of Department Thirty U.S. (Fed) Ben Bernanke negative, but what is happening to large banks leading this world?
In contrast the history: Bank of America – based in North Carolina state, USA – is the largest bank if the world by total assets (over 2.7 thousand billion USD), and the second largest world if the balance of deposit .
At the time of day 2/20/2009, banks have capital levels and market reaches 24 billion USD. BoA currently has over 171 thousand employees, have relationships with customers in over 150 countries worldwide and 99% of companies in U.S. Fortune 500 (the company richest America) is a customer of the bank hey.
BoA is in the group companies of the industrial average and the Dow Jones is a member of the FDIC (Insurance Corporation Federal deposit).
Started by BoA from Bank of Italy Bank – founded by Amadeo Giannini in San Francisco in 1904. At the end of 1920, Giannini had access Orra Monnette, President of Bank of America, Los Angeles in 1929 and has completed the merger of two banks, get the name of our Bank of America.
In 1958, the bank card issuer BankAmericard, whose is by VISA card payment later. 1967, BankAmerica Corporation was established to manage Bank of America branch and its laws by Bank Holding Company Act of 1967.
Bank of America began to expand outside California in 1983 with the acquisition of Seafirst Corporation is headquartered in Washington and Seattle bank First National Bank-owned corporations this.
BankAmerica Corporation met great loss to the 1986, 1987 due to bad debts in countries third world, particularly in regional Latin American corporations to make dismissal CEO (CEO) Sam Armacost and first before buying the victim bought.
Then, less BoA to sell some parts for Chrysler, Deutsche Bank and Mr.Schwab.
The sales purchase, merger: In 1994, BankAmerica acquired Continental Illinois National Bank and Trust Co.. of Chicago. This trade made BankAmerica Corporation became the largest bank based on U.S. total deposit.
However then, the first position has been occupied by NationsBank Corporation and then to continue with First Union Corp. extravagant, just keep 3rd position in 1998. In 1998, NationsBank bought BankAmerica be, and moved headquarters to Charlotte, North Carolina.
Mergers between NationsBank and BankAmerica originated from sales flows broken by this bank with D. E. Shaw & Co., a major fund protection in 1997. In the Bank’s funds for this USD 1.4 billion loan to fund this implementation, the services business for the bank. Song D.E. Shaw met big loss after crisis in Russian bonds in 1998 and then to 10 in that year, BankAmerica bought with NationsBank.
At that time, this is the purchase of the largest bank in history. Of Technology, is the BankAmerica Corporation was acquired by NationsBank, but sales are in the form of merger and then renamed NationsBank Corporation Bank of America.
This new bank with total assets USD 570 billion, with 4,200 branches in 22 states of America. Then, this bank make a series of sales purchase merger in which the acquisition of the U.S. Trust with USD 3.3 billion, to buy ABN Amro North America and LaSalle Bank with a total value USD 21 billion both in 2007, raising total assets to BoA 1.7 thousand billion.
Month 9 / 2008, BoA statement that the acquisition of the entire corporation Merril Lynch with a total value of up to 50 billion USD, variable BoA’s corporate financial services world’s largest. This trade was completed on 5/12/2008.
The mistakes and the ability to “nationalize”? : In the history of their activities, BoA has a number of sales that debate. Many policies, such as bank fees limited, telemarketing services, policies … the credit card has been strongly criticized.
In particular, the emerging Chairman cum CEO Ken Lewis decided to buy Merrill Lynch, while sources have said that he was aware of perforation of this corporation.
To Then, Merril Lynch has reported drill your 4 / 2008 to 21.5 billion USD, making the U.S. Government must consider the ability to “good research” for BoA early 2009.
2/20/2009 today, White House has an up trấn fame when rumor of the BoA and Citigroup will buy back the government.
Actually in the Western countries, it is quite lest termed: Nationalize (nationalised). However, there have been many precedent in the past, when governments in implementing this action is quite effective.
Sweden had acquired the bank in financial crisis and re-structure, create profits then private and public. France also had bought the banks then sold to investors and now is seems to make a wave “nationalize” the next.
Right in the U.S., the government also took control of hundreds of financial crisis in lending two decades ago, then sold the liquidation of bad assets, a policy has been evaluated as quite successful.
Back to BoA, stock price bank has decreased from 43.46 dollars per share during the highest down to approximately 4 dollars per share in one years. This causes millions of shareholders very disappointed.
2/10/2009 today, after shares BoA’s go through a week ski slopes not brake, BoA’s CEO, Ken Lewis has sent mail to internal staff, which affirmed the report of the Government BoA want to control is “unfounded”, that BoA “without more support from the Government”, affirmed determination to overcome crisis as “one of the corporations financial services leading the World “.
He asserted himself and his team operated by the bank will continue to buy shares BoA’s and hope this action on the firm belief of his to the future of corporations.
However, there are also many ideas for things that are BoA is too slow, so for example with Citigroup is actively sort and find ways to handle bad debts. Even demanding his comments Ken Lewis to retire.
Some comments that the Government should support U.S. banks have problems through measures to support financial and prevent bank liquidation sale of assets flags, rather than the authorities who control this bank, action will be assessed cost thousands of U.S..
Among the comments to say “no” with the intervention of government, with comments supporting the search for capital from outside the U.S. up to the BoA. However, in the current context where most of the major economies in the world are affected and no signs of crisis have hit bottom, this ability to show here is quite remote.
Tags: Bank of America, Economy news, Trading market news
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April 1st, 2009 at 9:58 am
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