Banks tank after bond investors turn on BoA

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Bank shares in the US dived overnight after a group of investors united to try force Bank of America to repurchase soured mortgages packaged into $47bn of bonds.

Pimco, BlackRock and the Federal Reserve Bank of New York are among the bondholders which wrote a letter to Bank of America and Bank of New York Mellon, the debt's trustee, citing alleged failures by BoA's Countrywide unit to service loans properly. Bank of America lost 4.4% yesterday following the Bloomberg report. The largest lender in the US was performing well in early trading following strong Q3 results. It led Citigroup down 4.38% and JPMorgan Chase 2.64% lower. UK banks are higher however, with Lloyds, Barclays and RBS about 0.6% ahead. The bondholder group is among investors...

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