Bank of Americawas criticized by several members of Congress, including one of Ohio's Senators, last week for transferring a reported $55 trillion in risky Merrill Lynch derivatives onto taxpayers by moving them into the retail banking unit that holds federally insured deposits.
Monday’s bankruptcy filing by MF Global (NYSE: MF) is likely to fuel concerns that the cowboys on Wall Street are still riding high. Many were in disbelief over the amount of leverage the firm was using to place big bets on European sovereign debt.
Little is known about the Merrill Lynch derivatives transferred within BofA.
That prompted Sen. Sherrod Brown, D-OH, and Rep. Brad Miller, D-NC, to send letters to banking regulators calling for more visibility into the transfer. More than a dozen Democratic members of Congress signed the letters.
“If banks are going to gamble, they should do it with their own money,” Brown said. “Ending ‘too big to fail’ means that depositors and taxpayers are not asked to cover Wall Street losses. It’s time to put an end once and for all to taxpayer-funded bailouts of reckless banks.”
Bank of America has home loan branches in the Dayton region and throughout Ohio, and recently bought the largest Class A office tower in downtown Dayton.