As credit froze and the bailouts came, BoA insiders loaned hundreds of millions to each other
So who said lending stopped? Charlotte News & Observer:
Bank of America vaulted into the top 10 banks for insider lending last year with an increase of more than $358 million, much of it coming as credit markets froze and mounting financial calamity threatened the industry's survival.
For at least seven years, the bank's quarterly insider lending never exceeded $300 million and was often less than half that. But by the end of 2008, it had jumped to $624 million.
The dollar gain was the biggest of any bank in the country, a 135 percent hike from a year earlier. The average for all banks with insider loans was 5.7 percent.
The bank wouldn't say what drove the doubling. The bank's lead director, Temple Sloan, did not respond to two calls for comment.
The bulk of the gain came in the third quarter, when the financial sector entered its meltdown.
By definition, insiders are banks' executives, directors and any very large shareholders, and their companies.
Bank directors typically account for the biggest insider borrowing because they are often top executives with major companies, which routinely need bank loans. ...
Every quarter, banks have to report insider lending to regulators, but they don't have to say much. They report the total amount and the number of large borrowers, typically those with loans or credit lines of more than $500,000. But no names are reported, except upon request. ...
Bank of America reported six major borrowers for each of the last five quarters. At The Charlotte Observer's request, the bank had to name the three who are executives. They are mortgage head Barbara Desoer, chief financial officer Joe Price and Keith Banks, head of global wealth and investment management.
Gee, it's great to be an insider! And don't you get a warm feeling inside, knowing that you personally bailed out Babs, Joe, and Keith? I know I do!
NOTE Sounds like a bus tour of the Charlotte area might be a propos ...