What is your concern with the MER-BAC deal? I thought M&A was one long-standing solution for “buggy-whip co’s”? I can see potential kicking-the-can-down-the-road of problems in the whole sector, by making commercial/investment amalgams now the perceived solution, but please elaborate.
Here are two concerns over the MER BAC deal.
While the insured assets of BAC operating company will not increase the likely hood there will be a call goes up. FDIC if thinking correctly will have to raise rates on everybody to cover the additional risk. FDIC should moratorium these combinations until everything else get sorted out.
Second MER is a house of cards fundamentally. Even without the current liquidity and derivative issues. If BAC wanted to get into the lines of business you see at a BD like MER they would be better off buying them piecemeal. But I would not recommend that for BAC share holders.
The repeal of Glass-Steagall permits this mergerm, but it should not grant an automatic approval. I am BTW in favor of repealing the repeal of Glass-Steagall. I have quite a bit of personal experience in this and it is an ugly outcome.