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Gold/Mining/Energy : Gold Price Monitor
GDXJ 121.87+3.9%4:00 PM EST
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To: russwinter who wrote (62513)5/31/2002 7:04:01 AM
From: long-gone   of 116842
 
Friday May 31, 4:47 am Eastern Time

Reuters Business Report
Bank of America Mothballs Subsidiary

LONDON (Reuters) - Bank of America said on Friday it has mothballed its Bank of America Financial Products subsidiary which handles a small volume of derivatives trades for a select group of clients.

The US-based subsidiary was set up in early 1996 and carried out its first trade in November of that year, a spokesman for Bank of America (NYSE:BAC - News) said.

"It was set up by Nations Bank which at that time was rated around A- and so was shut out of certain complex derivatives deals," said the spokesman. "Setting up the better-rated bankruptcy-remote subsidiary enabled them to do those deals."

Nations Bank later merged with Bank of America which became a much larger and more highly rated business and no longer required a specialist unit to be active in all derivatives markets, the spokesman said.

But Bank of America Financial Products, which conducted 95 percent of its business in interest rate derivatives, is not being closed entirely. Rather it is being barred from taking on new business while the bank plans what to do with it in future.

The subsidiary will continue to service all outstanding trades, however.

biz.yahoo.com
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