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Bank of America is 2nd Major U.S. Financial Institution to Face Derivatives Proxy Vote By Shareholders April 26th, 2010

bank-of-americaThe verdict at BofA’s Wednesday Annual Meeting comes on the heels of a huge 30 percent support at Citigroup on the same Resolution. Of the four derivatives disclosure resolutions being filed, that with BofA may be the most telling, considering how the mishandling of Credit Default Swaps (a type of derivative) tripped up BofA’s Merrill Lynch.

With a much higher-than-expected 30 percent of Citigroup shares voted on April 20th in favor of more disclosure of derivatives practices, the focus now shifts to Bank of America (BofA), where shareholders will vote Wednesday (April 28th) on the same resolution sponsored by faith-based institutional investors belonging to the 300-member Interfaith Center on Corporate Responsibility (ICCR). The BofA vote will take place as Congress debates the fate of financial regulatory reform, including increased derivatives disclosure.

The resolution gives shareholders an opportunity, as they did at Citigroup, to express their concerns about the lack of transparency in the derivatives market that contributed significantly to the financial crisis. The higher-than-expected vote from Citigroup shareholders resulted even though the United States government, which controls 27 percent of Citigroup as a result of the bank bailouts, failed to fully support the resolution.

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