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Bank of America disclosed yesterday that it had made a significant error in the way it calculates a crucial measure of its financial health, the New York Times reported today. The mistake, which had gone undetected for several years, led the bank to report recently that it had $4 billion more capital than it actually had. After Bank of America reported its error to the Federal Reserve, the regulator required the bank to suspend a share buyback and a planned increase in its quarterly dividend. While regulators still believe Bank of America has sufficient capital, the disclosure of the accounting error will most likely add fuel to the debate over whether the nation’s largest banks are too big and complicated to manage.

The Swiss units of Goldman Sachs Group Inc. and Morgan Stanley have agreed with U.S. authorities to hand over potentially incriminating details about how they might have helped Americans evade taxes, the Wall Street Journal reported today. In return, the two banks won't face prosecution in the U.S., though they could be hit with financial penalties equal to as much as 50 percent of the value of the undeclared U.S. accounts they've handled. Banks in this part of the program, dubbed category 2, agree to comb through their books and compile information about how they set up Swiss accounts for U.S. clients. That information, including how much was contained in the accounts, must be reviewed by an independent examiner.

As regulators tighten rules on the U.S. swaps market, large American banks are maneuvering to take some of the business overseas, the Wall Street Journal reported today. Banks including Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are changing the terms of some swap agreements made by their offshore units so they don't get caught by U.S. regulations. The changes have generally focused on new trades between the London affiliates of U.S. banks, or between those units and non-U.S. banks, which combined constitute a large portion of swaps trading. The shift means the U.S. parent bank is no longer the guarantor of some swaps issued by its foreign affiliate. Instead, any liability for such swaps lies solely with the offshore operation.

Reederei Heinrich, a 149-year-old German shipping company, risks losing two of its three vessels unless it repays loans as financial stress in the industry spreads to banks facing a European Central Bank review, Bloomberg News reported today. The company, established near Hamburg, Germany’s biggest port, has endured misfortunes such as the death of a family member struck by anchor chains and ships that ran aground. Now General Manager Jens Robrahn says he’s concerned that HSH Nordbank AG may call in 22 million euros ($30 million) of outstanding debt and seize two boats acting as security.

Two years after Lynn Szymoniak helped the U.S. recover $95 million from Bank of America Corp. and other lenders for mortgage-fraud tied to the housing bubble, the whistle-blower said the government is ignoring a chance to collect more money for identical claims against other banks, Bloomberg News reported today. Szymoniak got $18 million when the U.S. Justice Department intervened in her foreclosure-fraud lawsuit. The government negotiated a settlement with five lenders including Bank of America and JPMorgan Chase & Co. The other banks accused of the same behavior, including Deutsche Bank AG and HSBC Holdings Plc (HSBA), are still fighting Szymoniak’s suit, saying that she isn’t a true whistle-blower. And the U.S., while continuing its crackdown on banks that packaged risky loans for sale as securities, hasn’t joined with her this time, leaving her to fight the banks alone. U.S. District Judge Joseph Anderson in Columbia, S.C., today is set to consider their bid to throw the case out.

U.S. prosecutors are seeking more than $13 billion from Bank of America Corp. to resolve federal and state investigations of the lender’s sale of bonds backed by home loans in the run-up to the 2008 financial crisis, Bloomberg News reported today. The settlement would come on top of the $9.5 billion the bank agreed last month to pay to resolve Federal Housing Finance Agency claims, and a deal could come within the next two months. If the Justice Department gets its way, the case against Bank of America will eclipse JPMorgan Chase & Co.’s record $13 billion global settlement over similar issues in November. That settlement, which included a $4 billion agreement with the FHFA, encompassed loans JPMorgan took over with its purchases of Washington Mutual Inc. and Bear Stearns Cos.

Irish Bank Resolution Corp., formed to complete the liquidation of Anglo Irish Bank Corp., asked a U.S. bankruptcy judge to approve the sale of loans with nominal balances totaling more than $19 billion, Bloomberg News reported yesterday. The proposed purchasers of the U.S. assets include affiliates of Goldman Sachs Group Inc., Deutsche Bank AG and Lone Star Funds, according to an April 22 filing by the liquidator of the nationalized lender in U.S. Bankruptcy Court for the District of Delaware. Ireland’s government seized the Dublin-based bank in January 2009 as its bad loans soared following the collapse of the nation’s real estate market. IBRC filed for creditor protection in Delaware in August to protect its U.S. holdings during the wind-down. The liquidator, Kieran Wallace, asked the judge to consider approving the loan sales at a May 13 hearing. Ireland’s government put the nationalized lender, Irish Bank Resolution Corp., into liquidation in February last year under a plan to restructure its 34.7 billion-euro ($46.3 billion) bailout.

The Supreme Court of Georgia is considering whether a Georgia law protects the corporate officers and former executives of a Buckhead bank that failed under their watch from personal liability for the bank's losses even if they neglected their corporate duties, the Daily Report reported today. The justices heard oral arguments on Monday because U.S. District Judge Thomas Thrash sought their interpretation of the state's business judgment rule and how it may apply to bank directors and officers in a suit brought by the FDIC against them. The business judgment rule, in general, protects company officers from liability when they make "good faith business decisions in an informed and deliberate manner," according to a 2009 ruling by the Georgia Court of Appeals (Brock Built v. Blake, 300 Ga. App. 816). The presumption behind the rule, according to the appeals court, is that a company's corporate officers have acted on an informed basis, in good faith, and with the belief that any actions they took were in the best interests of the company. As a result, they can't be held personally liable for managerial decisions that turned out badly, caused harm or led to a company's collapse, and the state courts shouldn't second-guess those decisions.

Six years after getting a failing grade for their role in the financial crisis, credit-rating firms are at the top of the class, the Wall Street Journal reported today. Riding a global bond boom, the two biggest U.S. firms, Standard & Poor's Ratings Services and Moody's Investors Service, this month are expected to post record first-quarter profits. Fitch Ratings said in its annual filing this month that 2013 was "one of its best years ever." Beyond the spike in bond deals, the resurgence is due largely to the absence of major changes to the industry since the crisis: The business model, in which debt issuers pay for ratings, remains in place; regulations proposed years ago are yet to be implemented; and new competitors have gotten little more than a toehold. This is despite heated rhetoric from regulators and legislators in the wake of the crisis, in which they castigated the firms for giving elevated ratings to mortgage-related bonds that later soured. The industry's ability to escape relatively unscathed is in contrast to others, most notably big Wall Street banks, that have been the target of a wave of regulation designed to change behavior that contributed to the meltdown.

Business Capital has secured an $8.5 million DIP loan for Pacific Steel Casting, one of the largest independent steel casting companies in the U.S. that makes carbon, low-alloy and stainless steel castings for U.S. and international customers, largely for heavy-duty trucks and construction equipment, ABLAdvisor.com reported yesterday. PSC, a major employer based in Berkeley, Calif., since 1934, is in its fourth generation of ownership. The company recently filed for chapter 11 protection to enable it to restructure its liabilities and remain in operation.