Bank of America

Bank of America announced that they have settled with a class action suit brought by shareholders. When they bought Merryll Lynch, it was not disclosed that they were buying huge amounts of bad mortgages. Because of this they had to accept 2 bailout packages from the govt. B of A does not admit any wrong doing. They simply say the settlement outweighs the risks of continuing a lawsuit. This is all well and good but it got me to thinking. How is it that we are in such a financial crisis but banks continue to make enough money to write off amounts like this. In this case it is around $2 billion. Shortly after Chase announced that they lost $2 billion a month later they said it was worse than they thought. It was actually closer to $4 billion. However, they said, it will not affect our shareholders. How does $4 billion loss not affect is how. They are making so much money it is a cost of doing business. The banks are doing very well. It is harder to get a loan but they are not being held accountable for their mistakes. They are not waiving fees or principal. They are foreclosing as fast as they can (very slow). They remain unregulated. In the financial sector it appears to be business as usual. Banks seem to be riding this crisis out. I guess they are not making as much as they used to..but they are certainly making enough to stay viable.


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Tags: class action banks

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