Investors punished Bank of America Corp (NYSE:BAC) yesterday after finding out that the company had made a mistake in its Comprehensive Capital Analysis and Review (CCAR) filing by overstating its common equity tier 1 capital ratio. It turns out that Bank of America mishandled debt valuation adjustments (DVA) on structured notes that it assumed when it took over Merrill Lynch during the financial crisis, forcing it to put its buyback and dividend plans on hold while it resubmits, but stock’s 6% drop seems like an overreaction to a mistake that is more embarrassing than devastating. Self-reporting should work to BAC’s…
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