The 116 banks that are receiving billions in taxpayer-provided bailout money this year actually paid out $1.6 billion in compensation and benefits to their top executives last year – even though the results at some of these institutions were so poor that they would soon have to turn to Washington for a government-engineered rescue. The $1.6 billion was paid out to nearly 600 executives at the 116 banks that have so far accepted federal money to bolster their financial foundations, The Associated Press concluded after a review of U.S. securities filings. In addition to salary, the compensation included bonuses paid in both cash and stock. The benefits reaped by top executives included the use of company jets for personal purposes, personal chauffeurs, home-security services, country-club memberships and professional-wealth-management services, the news service said. U.S. Rep. Barney Frank, D-Mass., a longtime critic ...

After U.S. Federal Reserve policymakers meet today (Monday) and tomorrow (Tuesday), most experts expect a half a percentage point cut in the benchmark Federal Funds Rate – which is already 1.0%.

That doesn’t leave members of the central bank’s policymaking Federal Open Market Committee (FOMC) much room to maneuver. Still, the policymakers may have more ammunition in their arsenal and the statement that accompanies the rate decision at the end of the two-day session could shed some insight on the “creative” actions the Fed could consider in addition to rate cuts (For instance, the central bank could extend the new investment firm discount window, offer additional loan guarantees, or utilize any number of other tools).

And the Fed may well have to use those other tools. As Japan’s “Lost Decade” demonstrated, “zero” interest rates won’t necessarily jump-start an economy – especially when interest

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After U.S. Federal Reserve policymakers meet today (Monday) and tomorrow (Tuesday), most experts expect a half a percentage point cut in the benchmark Federal Funds Rate – which is already 1.0%. That doesn’t leave members of the central bank’s policymaking Federal Open Market Committee (FOMC) much room to maneuver. Still, the policymakers may have more ammunition in their arsenal and the statement that accompanies the rate decision at the end of the two-day session could shed some insight on the “creative” actions the Fed could consider in addition to rate cuts (For instance, the central bank could extend the new investment firm discount window, offer additional loan guarantees, or utilize any number of other tools). And the Fed may well have to use those other tools. As Japan’s “Lost Decade” demonstrated, “zero” interest rates won’t necessarily jump-start an ...

Shares of Bank of American Corp. (BAC) fell more than 26% during trading yesterday (Tuesday) as investors reacted to the company’s disclosure that it was cutting its dividend after its third-quarter earnings plunged a stunning 68%.

Shares of Bank of American Corp. (BAC) fell more than 26% during trading yesterday (Tuesday) as investors reacted to the company’s disclosure that it was cutting its dividend after its third-quarter earnings plunged a stunning 68%. The Charlotte-based BofA also said it will cut its dividend in half – to 32 cents a share – and will sell as much as $10 billion in common stock to beef up its balance sheet. The dividend cut underscores the crisis-like capital situation in the U.S. banking sector, especially since Bank of America executives had repeatedly told Wall Street that the bank would not cut the dividend, and had sufficient capital in place to maintain the 64-cent-a-share quarterly payout. But at its current stock price, an annual dividend payout of $2.56 a share equates to an unrealistic – and unsustainable – dividend yield of more than ...

The U.S. financial-services sector is undergoing the broadest restructuring of a single industry in the history of Corporate America, and Bank of America Corp. (NYSE: BAC) has positioned itself to emerge as one of three clear frontrunners. Indeed, along with Citigroup Inc. (NYSE: C) and JPMorgan Chase & Co. (NYSE: JPM), Bank of America could well emerge from this financial maelstrom as one of the premier players on the global stage: All three will benefit from increasing market share and increased financial intermediation margins as their weaker rivals have failed and/or been taken over in part or in total by a stronger industry player. During the many financial crises that I have analyzed around the world, the result has always been the same: The prudently managed, under-levered institutions that did not overstretch their capital bases and that were ...

After executing a preemptive sale of investment bank Merrill Lynch & Co. Inc. (MER), Chief Executive John A. Thain will remain with Bank of America Corp. (BAC) after the merger, the Charlotte-based bank announced yesterday (Thursday).

After a weekend in which the deepening U.S credit crisis sent one top investment bank to bankruptcy court and a second into the arms of a “White Knight” suitor, U.S. stocks yesterday (Monday) recorded their worst day since the 9/11 terrorists attacks seven years ago. Indeed, the Dow Jones Industrial Average plunged more than 504 points, its biggest one-day point decline since Sept. 17, 2001 – the day the markets reopened for trading after the attacks on New York and Washington. Wall Street entered last weekend anticipating a government bailout of Lehman Brothers Holdings Inc. (LEH), but exited with Merrill Lynch & Co. Inc. (MER) agreeing to sell itself to Bank of America Corp. (BAC) for nearly $50 billion – and with Lehman announcing it will seek bankruptcy in a bid to avoid a total ...