Published November 02, 2012
Bank of America Corp could already be above capital requirements issued on Thursday by global regulators, the bank's chief financial officer said.
If the bank's models were approved, Bank of America would be in "excess" of the FSB's guidelines, CFO Bruce Thompson said Friday at an investor conference.
The Financial Stability Board, a regulatory task force for the group of 20 top economies, said on Thursday the second-largest U.S. bank should hold common equity equal to 8.5 percent of its risk-weighted assets, less than the 9.5 percent of rivals Citigroup Inc and JPMorgan Chase & Co .
At the end of the third quarter, Bank of America reported a Tier 1 common capital ratio of 8.97 percent under so-called Basel III rules that are to be phased in starting next year through January 2019.
"What came out yesterday obviously makes our glide path to Basel III a little bit shorter than what a lot of people have expected," Thompson said.
He said the FSB's determination reflected the bank's efforts to simplify the company by selling off non-core businesses and riskier assets since Chief Executive Officer Brian Moynihan took charge at the beginning of 2010.
In its statement on Thursday, the FSB for the first time detailed the extra capital buffers that 28 global banks would have to maintain on top of a 7 percent minimum required under Basel III. The group's requirements will be revised two more times before they are set to be phased in starting in 2016.
Regulators in each country are ultimately in charge of imposing the requirements, and Evercore Partners analyst Andrew Marquardt suggested in a research note on Friday that U.S. regulators could still require Bank of America to hold the same amount of capital as JPMorgan and Citigroup.
Asked about the Fed's intentions, Thompson said the FSB guidelines are a global standard "meant to be implemented," but he added "the last thing I'm going to do is speculate what is or isn't going through the Federal Reserve's mind at this point."
(Reporting By Rick Rothacker in Charlotte, North Carolina; Editing by Gerald E. McCormick and Richard Chang)