Tuesday, January 16, 2007

Bank Of America: Trying to Break the Glass Ceiling...

A report by Market Watch this morning mentions that the Bank Of America is looking to lift the 10% cap on deposits for all U.S. banks.

"Bank of America is now the nation's largest holder of deposits and ranks as the second-largest U.S. bank by market value after Citigroup."

Bank of America goes on to make a good point for why they would like to lift the cap in order to grow to become a larger force...

"In addition to restricting the growth of giants, the cap keeps U.S. banks artificially small and makes them vulnerable to international acquirers that aren't similarly limited."

"Over time, foreign banks will be in a position to buy U.S. banks."

They're not saying how much higher they'd like the cap to go, or even if the cap should be taken off all together. The banks move to try and lift or even eliminate the cap is being opposed by the Independent Community Bankers of America and other small community banks. But interestingly The Bank of America have a few allies in this matter, like Barney Frank, chairman of the House Financial Services Committee. It should be interesting if they actually do get the cap lifted or even removed. How big could they become, and would that be good for America? I'll wait and see...

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