April 29, 2014: 9:57 AM ET
These days, banks are required to keep two sets of books. The only surprise about BofA’s error is that it doesn’t happen more often.
FORTUNE — On Monday, Bank of America revealed that it may have hidden as much as $4 billion in losses from regulators over the past five years. The bank said it was an honest mistake. But this seemed like another “shame on you Wall Street” moment.
Making matters worse: Bank of America (BAC) asked and just received approval from the Federal Reserve to up its stock buyback plan by $4 billion, a figure that nicely matches up with the losses it was hiding. That is probably a coincidence, but it made the revelations even fishier. Regulators, unsurprisingly, have put Bank of America’s buyback on hold for now.
Outspoken CLSA bank analyst Mike Mayo seized on the moment to state once again that this is more evidence that Bank of America is too big to manage — the go-to response these days to any big bank loss — and says he plans to point that out at its annual meeting next week. “It’s garbage in, garbage out,” says Mayo, who has been tough, and often correct, on the banks. “They have a $2 trillion dollar balance sheet. What other losses are in there? It raises issues about control.”