BofA told Fed it could sell branches in emergency: source

By Rick Rothacker

(Reuters) - Bank of America Corp (BAC.N) told Federal Reserve officials in June that it could shed branches in some parts of the country if it needed to raise capital in an emergency, a person familiar with the matter said.

The proposal was part of a series of options provided to the Fed, including issuing a tracking stock for its Merrill Lynch operations. The fact that the bank proposed selling branches doesn't mean it's a desirable move or highly probable, the person said.

Bank of America Chief Executive Officer Brian Moynihan has been under pressure to raise capital to absorb mortgage-related losses and meet new international standards. The second largest U.S. bank received government bailouts during the financial crisis and emerged as one of weaker institutions in its aftermath.

Since June, Moynihan has taken a number of steps to boost capital levels, including selling nearly $15 billion in China Construction Bank Corp shares and swapping preferred shares for common stock. The bank has said a measure of capital against risk-weighted assets improved to at least 9.25 percent at the end of December, up from 8.65 percent at the end of September.

The bank will provide more details when it reports fourth-quarter earnings on Thursday.

Bank of America spokesman Jerry Dubrowski declined to comment on the bank's interaction with regulators. "We've made significant progress over the last two years to streamline the company, eliminate complexity and strengthen our balance sheet," he said.

The Wall Street Journal first reported on Thursday the possibility that Bank of America could shed branches in an emergency.

Bank of America, which had 5,715 branches at the end of September, has already said it plans to shutter about 750 locations over the next few years as part of a broad cost-cutting initiative. Wells Fargo & Co (WFC.N) has about 6,300 branches, while JPMorgan Chase & Co (JPM.N) said on Friday that it has about 5,500.

Dubrowski said the bank routinely analyzes its bank branch network on a market-by-market basis. The bank could increase branches in some cities, and decrease them in others, he said.

Bank of America became the first coast-to-coast U.S. consumer bank through a series of acquisitions in the 1980s and 1990s. But its more recent deals, especially the 2008 purchase of Countrywide Financial under Moynihan's predecessor, Ken Lewis, have proven troublesome. The subprime mortgage lender saddled the bank with billions of dollars in bad loans as well as lawsuits related to soured mortgage-backed securities.

The bank's shares fell nearly 60 percent last year amid concerns about the company's capital position, but are up 19 percent this year. The shares closed Friday at $6.61, down 2.7 percent.

(Reporting By Rick Rothacker in Charlotte, North Carolina; Additional reporting by Kavyanjali Kaushik in Bangalore; Editing by Kim Coghill and Carol Bishopric)

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New molecule could help cool planet

By Nina Chestney

LONDON (Reuters) - A new molecule has been detected in the earth's atmosphere which could help produce a cooling effect, scientists said, but it remains to be seen whether it can play a major role in tackling global warming.

The molecule can convert pollutants, such as nitrogen dioxide and sulphur dioxide, into compounds which can lead to cloud formation, helping to shield the earth from the sun, the researchers said.

Over the past century, the earth's average temperature has risen by 0.8 degrees Celsius. Scientists say the increase must be limited to below two degrees Celsius this century to prevent rising sea levels and other unwelcome consequences.

But mainstream ways of curbing warming, such as renewable power and energy efficiency, are not delivering results nearly enough.

In a paper published in the journal Science on Thursday, researchers from the universities of Manchester and Bristol, and the U.S.-based Sandia National laboratories detected the new molecules, called Criegee biradicals, using a powerful light source 100 million times stronger than the sun.

"We found the biradicals could oxidise sulfur dioxide, which eventually turns into sulphuric acid, which has a known cooling effect," Carl Percival, one of the study's authors and a reader in atmospheric chemistry at the University of Manchester, told Reuters.

However, it is too early to predict how many molecules would have to be formed to make a substantial impact on the world's temperature and their safety would have to be tested.

The effects of cloud formation on the climate are so still far from understood.

COOLING OFF

When Mount Pinatubo in the Philippines erupted in 1991 it released huge amounts of sulphur dioxide, which formed a haze of sulphuric acid. This reduced the amount of sunlight which was able to reach the earth by about 10 percent, lowering global temperatures by around 0.5 degrees Celsius over two years.

However, high concentrations of sulphur dioxide injected into the atmosphere by large explosions could also cause lung ailments, acid rain, and the depletion of the earth's protective ozone layer.

"The biradicals themselves are not a geo-engineering candidate," Percival said, ways of cooling planet referring to radical the down, such as artificial volcanoes or whitening the clouds to make them reflect more sunlight.

The molecules detected by the research team occur naturally in the presence of alkenes, chemical compounds which are mostly released by plants.

"Plants will release these compounds, make the biradicals and end up making sulphuric acid, so in effect the ecosystem can negate the warming effect by producing these cooling aerosols," Percival said.

The greatest cooling effect could be potentially felt in areas where there are high concentrations of both alkenes and pollutants, which enable the biradicals to react.

"(The effect) would really spots like Hong kick in hot Kong or Singapore," Percival said.

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