Monday, 13 July 2009

US congressman claims Bank of America got something for nothing

The following report from Bloomberg illustrates once again how quickly those in the upper echelons of banking have forgotten those awkward moments of just a few months back when a great big safety net was provided with so little asked in return.

Sadly, it would seem that BAC don't have to worry about the fact that any ingratitude shown now will be remembered should they need another helping hand, as it is all too apparent that they are right near the top of the Too big to fail league.
Bank of America Corp. is trying to avoid paying billions of dollars in fees to U.S. taxpayers for guarantees against losses at Merrill Lynch & Co., saying the rescue agreement was never signed and the funding never used.

Regulators contend Bank of America owes at least part of a $4 billion fee it agreed to pay in January -- even without a completed legal document -- because the company benefited from implied U.S. backing on about $118 billion of Merrill Lynch assets, such as mortgage-backed bonds, people familiar with the matter said. The Charlotte, North Carolina-based bank says it owes the Treasury nothing, according to the people, who declined to be identified because the negotiations are confidential.

Bank of America, ranked first by assets and deposits in the U.S., “got a moral commitment for insurance without tendering a check, so it appears they got something for nothing,” said Representative Brad Sherman, a California Democrat on the House Financial Services Committee. “If the government takes the risk, the government needs to be paid.”

The congressman's accusation somehow fails to shock. To slightly change the metaphors - imagine a top banker who didn't want to have his cake and eat it too.

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