Those concerns have churned the rumor mill. And apparently, it has been freaking out clients who hold their money in Merrill Lynch and are concerned about what might happen if the firm is the next Lehman Brothers.
The suggestion is unfounded, but there have been numerous rumors flying around BofA that would spark speculation (including the ridiculous rumor that JPMorgan might acquire BofA). In fact, rumors have been so rampant recently that JPMorgan issued a research note upgrading the firm because of "irrational" market behavior.
Although not very reassuring, a broker from Merrill Lynch says he's been telling worried clients, don't worry, your money is safe because "Ben Bernanke said we're too big to fail."
According to Investment News:
Merrill Lynch advisers have been forced to reassure clients over the past few weeks that their parent company is not headed for insolvency...
“It's definitely making our job more difficult,” said a veteran Merrill broker, who asked not to be identified. “Clients are calling and asking if their money is safe at the bank. I tell them Ben Bernanke said we're too big to fail.”
A better answer:
In the past week, the firm has done a lot to reassure investors—including selling a $5 billion stake to Warren Buffet, and sell a 5% stake in CCB for $8 billion—that its capital position is fine. And in August, it has generated approximately $5.8 billion in additional Tier 1 common capital, according to the firm's CFO Bruce Thompson.
Today BofA's stock is rallying off news of the sale of half of its CCB stake.
This story originally appeared on Business Insider
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