Friday's Headlines: Bank of America to fire 40,000; cut costs by 15%
Bank of America will announce a three-year restructuring plan that will eliminate up to 40,000 jobs and cut costs by 15% in three years, the Financial Times reports. However, most of the savings and job cuts are part of a plan announced in April. Up to 1,000 investment banking positions are on the line. The news comes in the wake of growing troubles at Bank of America and a management reorganization announced earlier this week.
Separately, Bank of America subsidiary Merrill Lynch has begun executing its previously announced lay-offs, DealBook reports. Several hundred bankers are being notified this week. Lay-offs will affect almost every unit, including sales, trading and investment banks.
"While the Merrill Lynch unit has been solidly profitable in 2010 and 2011, its parent, Bank of America, is in the midst of cutting 7,000 jobs this year, of which 3,500 are to be eliminated in the second half of the year, and only a relatively small number are coming from Merrill," DealBook writes.
Goldman Sachs break-up could make financial sense given weak stock. [BreakingViews]
SEC, FINRA investigate high-frequency trading hedge funds and investment banks. [On Wall Street]
"Shadow banks" move in where new regulation makes it tough for real banks to operate. [Financial Times]
UK's Old Mutual asset management may sell American unit to Touchstone Investments. [Reuters]
A year later, Dodd-Frank has created an industry to help Wall Street comply with and capitalize on new rules. [New York Times]
State Street starts derivatives clearing service with swaps platform. [On Wall Street]
Banks may reduce capital-intensive business amid new capitalization rules.[Financial Times]
Millenium raises $4 billion in new investments from sovereign, pension funds. [DealBook]
Fired Goldman Sachs banker finds success running SkyBridge Alternatives Conference. [Bloomberg]
Canada's Scotiabank to buy 20% stake in Chinese government lender Guangzhou. [Reuters]