Bank of America Corp. chief executive Brian Moynihan recently would not rule out the idea of putting Countrywide Financial into bankruptcy to cap its mortgage-related losses, but on Friday Bloomberg news reported that such a move is considered a “nuclear option” inside the bank.
Bank of America’s (NYSE: BAC) 2008 takeover of Countrywide is now considered a financial disaster because of Countrywide’s exposure to subprime loans. But Countrywide has remained a separate legal entity, giving Bank of America the option of putting it in bankruptcy, a move that could protect BofA from greater losses.
Bank of America is Washington state’s largest bank ranked by market share.
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