Bank of America's Bond Portfolio Woes: Impact and Revenue Generation Opportunities

Bank of America (BofA), the second-largest US bank by assets, is grappling with the consequences of decisions made during the pandemic, leading to significant paper losses in its bond portfolio. While BofA put the majority of its $670 billion pandemic-era deposit inflows into debt markets when bond prices were high and yields were low, other banks opted for a greater allocation to cash. As a result, BofA's unrealized losses at the end of the first quarter exceeded $100 billion, far surpassing its peers.