A group of consumer advocates is pressing the Federal Reserve Board of Governors and the Financial Stability Oversight Council to use the power the Dodd-Frank Wall Street reform law granted them.
"Bank of America currently poses a grave threat to U.S. financial stability by any reasonable definition of that phrase," the 24-page petition said.It said Bank of America, the nation's second-largest bank, is too large and complex, and that its financial condition could deteriorate rapidly at any moment, potentially causing the market to lose confidence in the bank.
"An ensuing run on the bank could cause a devastating financial crisis," the petition said.
That was precisely why this provision, Section 121, was included in Dodd-Frank, containing systemic risk provisions that allow federal regulators to order a "too big to fail" institution that posts a “grave threat” to basically shrink, to divest and to curtail its financial activities. The primary challenge is going to be getting these regulators to do this particular job, since the law also makes this action discretionary on their part.
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