OCCUPY BOSTON CLUED IN TO BOA SCAM

Occupy Boston learned this week that Bank of America’s holding company (BAC) has moved troubled derivatives from its subsidiary, Merrill Lynch, to Bank of America, which is insured by the FDIC and, ultimately, the US Treasury. Bloomberg News reports that BAC moved the troubled derivatives after having its credit rating downgraded last month. This downgrade was due to its relentless acquisition of failing companies like Countrywide Financial and Merrill Lynch, both of which have massive, hidden losses that will now to be borne by the 99%.

This means that Bank of America’s exposure to the ongoing European debt crisis is now insured by US taxpayers. This direct transfer of risk was completed without approval by regulators and, needless to say, without public input. It was done over the opposition of the FDIC, which objected because it put the insurance fund at risk. It was done with the support of the Federal Reserve, which, now more than ever, clearly represents the interests of the 1%. Bloomberg also reported that other investment banks’ derivatives positions have been placed in insured banks so that taxpayers will bear the risk of those losses as well. Collectively, the insured banks’ derivatives exposure is well over $100 trillion—far larger than the world’s GDP.

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