Xinhua, Washington :
The US Federal Reserve Board Monday required the Bank of America Corporation to resubmit its capital plan and to suspend planned increases in capital distributions due to the bank’s incorrect data reports.
The bank incorrectly reported data used in the calculation of regulatory capital ratios and submitted as inputs for the most recent stress tests conducted by the Fed.
“Bank of America must address the quantitative errors in its regulatory capital calculations as part of the resubmission and must undertake a review of its regulatory capital reporting to help ensure there are no further errors,” Fed said, asking the bank to resubmit its capital plan within 30 days.
The bank said in a statement on Monday that its incorrect adjustment related to the treatment of certain structured notes assumed in the Merrill Lynch & Co., Inc. acquisition in 2009. It also announced a downward revision to its capital levels and rations after correcting the calculations.
The Fed can require a banking organization that is part of the annual Comprehensive Capital Analysis and Review (CCAR) program to resubmit its capital plan at any time, if there is a material change that could potentially lead to an alteration in a firm’s capital position.
Until receiving notice that the Fed has not objected to the new capital plan, Bank of America will not be able to increase its capital distributions, including those increases approved during the 2014 CCAR exercise last month.
