What Will Happen as BofA Dissolves Merrill Lynch?
Bank of America (NYSE:BAC) will dissolve its subsidiary Merrill Lynch & Co. as early as the fourth quarter, according to a filing from August 2. Bank of America will assume all of Merrill Lynch’s obligations and debt while keeping the Merril Lynch brand for its retail brokerage and investment bank, Bloomberg reports.
The second-biggest U.S. lender, Bank of America bought Merrill Lynch in 2009 and is now attempting to simplify its structure. The merger could help Chief Executive Officer Brian T. Moynihan reach his cost-cutting target of $8 billion per year while also satisfying regulator demands to make the biggest banks less complex and easier to resolve in times of crisis.
David Hendler, an analyst at CreditSights Inc., explained via email, “Less-complex structures would increase the success of resolution planning via living wills in the case of potential worst-case financial distress scenarios.”