Bank of America Will Be Sure To Check Its Math Moving Forward

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Bank of America suspended a plan to buy back $4 billion of stock and boost its dividend after discovering an error in the way it calculated its capital levels...The second-largest U.S. bank by assets said it discovered the error and brought it to the attention of the Federal Reserve, which then required it to resubmit its capital plan. It has 30 days to do so. The Fed on March 26 approved Bank of America's proposal to increase its annual dividend to five cents a common share from a penny and expand its share buybacks. The Charlotte, N.C., lender said it now plans to request less than the previously approved plan...The misvalued structured notes were debt securities issued by Merrill Lynch. When the value of the underlying companies changed, the bank failed to readjust the value of the bonds as well. [WSJ]

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