MADRID, Nov 17 (Reuters) – Spain’s Santander plansto invest in the country’s so called bad bank in a sign thathealthy domestic lenders are willing to support the entitycreated to clean up the aftermath of a 2008 property crash.

Spain also is inthe process of creating a bad bank after the collapse of itsreal estate market left the country’s lenders with 180 billioneuros of problematic property loans and assets.

Madrid may now have to take a full sovereign bailout, with the state assuming the bad real estate assets unless it can find private sector investors to buy stakes in SAREB itself.

The bad bank’s creation is a condition ofreceiving up to 100 billion euros ($127 billion) of aid in aEuropean bail out of the country’s financial sector.

MC), is considering investing in the vehicle, but has yet to make a decision, a BBVA spokesman told Reuters on Saturday.

MC) – would likely be the biggest investors in the bad bank, with foreign investors steering clear.

MADRID (Reuters) – Spain’s bad bank will start with equity of 5 billion euros ($6.35 billion) and international investors are likely to focus on buying assets instead of becoming shareholders, a bank aid fund director said.

The FROB, which will be a shareholder in the bad bank, is searching for investors to take at least 51 percent of the vehicle, an onerous task, according to analysts including Krista Davies at Fitch Ratings.

If nationalized banks that transfer assets to the bad bank were forced to provide vendor financing for sales, it would perpetuate the subprime lending that initially got them into trouble.

Spain’s bad bank will struggle to sell the 90 billion euros ($117 billion) of toxic property assets it takes from other lenders because of its size and inability to help buyers finance purchases.

The government hopes eventually to capture 500 million euros of investment from foreign investors, or 10 percent of the final equity tranche.

Government sources said on Friday that Spain’s bank restructuring fund, the FROB, could use part of the European aid to invest in the bad bank, and as such, would not need to tap markets.

Premier Mariano Rajoy’s government seeks to purge about 180 billion euros of bad assets that the Bank of Spain says are on the balance sheets of lenders.

Have settled with MBIA, receiving money in exchange for promises not to pursue insurance claims against the company.

That was the liquidity position of MBIA Insurance, the company’s structured products unit, at quarter end.

MBIA is separately suing Bank of America, seeking to force it to buy back faulty loans in insured mortgage backed securities, and it claims the bank is delaying that case to starve the insurer of cash.

Without that money from B of A, MBIA will be in deep trouble, since claims on policies against commercial mortgage backed bonds are coming due in the near future.

MBIA is separately suing Bank of America, seekingto force it to buy back faulty loans in insured mortgage backedsecurities, and it claims the bank is delaying that case tostarve the insurer of cash.

In addition, it is suing the insurer to get back the money it claims MBIA owes it for the insurance on the toxic securities.

He estimated the bank has a $6 billionclaim swaps on the insurer, which would “be diluted with allthe other claims against MBIA Corp., and they’ll still owe the$5 billion in put backs,” he said.

And now, the bank has offered to buy up as much as it can of MBIA’s outstanding debt in an effort to prevent bondholders from accepting new terms that would protect the parent company from bankruptcy if regulators take over its Insurance arm.

The stock fell on news that Bank of America offered payment on par for the companys outstanding bonds.

The bank said it believes that if MBIA is successful in amending the terms of its debt, the banks own claims on complex financial products that MBIA was paid to insure would be jeopardized.

Investors apparently saw the threat as well, sending MBIA’s stock plunging.

It’s hard to blame the bank for wanting to line up with other creditors in the event of a bankruptcy — and it is taking steps to make sure its position is secure.

Meantime, the insurer turned in a somber Q3 report, showing a profit of $7 million — chicken feed compared to the $444 million it posted in the year ago quarter.

MBIA puts the blame for this situation squarely on the shoulders of Bank of America, claiming that Countrywide’s crummy mortgage portfolio and B of A’s refusal to pony up for selfsame loans are at the root of the problem.

The move by Bank of America could put in jeopardy MBIA’s hopes of recovering billions of dollars with respect to mortgage putbacks in its legal battle with the bank.

Bank of America wants Bransten to use Delaware law,
which essentially requires a finding that BofA’s acquisition of
Countrywide didn’t give Countrywide’s investors and creditors
fair consideration.

B of A settled similar suits with Assured Guaranty  (NYSE: AGO  )and Syncora Holdings, encouraging news for MBIA, particularly since it gave legs to the notion that suing banks for dicey MBS products really can work out.

Bolstering that idea is the revelation earlier this year of a mortgage fraud database, maintained by Countrywide, which MBIA sought to include in court proceedings.

B of A, naturally, pooh poohed the whole thing, although it has publicly chided MBIA for not paying close enough attention to the quality of the bundled mortgages passing under its nose.

This remark would seem to indicate that B of A knew its securities were crap, particularly when it noted that the insurer also ignored input from third party reviewers — who, one might assume, noticed the poor quality of said instruments.

And so plays out yet another drama featuring the never ending legacy of the financial crisis.

While the embattled bank fights on, it is also taking steps to bolster its bottom line.

To learn more about the most talked about bank out there, check out our in depth company report on Bank of America.

Bank of America said the purpose of its tender offer is to induce holders of record of MBIA bonds governed by 2004 legal language to sell their bonds.

By Ben TraynorBullionVaultLondon Gold market reportSpot market gold prices hovered just below $1738 an ounce Monday morning in London, close to three week highs, while stocks and commodities were broadly flat and the Euro traded near two month lows against the Dollar, as the US and Greece both contemplated upcoming fiscal difficulties.

Silver prices traded around $32.70 an ounce, also near three week highs.

Bullion importers in India, meantime, which sees the celebration of Diwali, slowed their purchases of gold Friday as the Rupee weakened and gold prices rose, newswire Reuters reports.

“Jewelry makers may have to wait before they come back to buy again,” says one physical bullion dealer in Hong Kong.

“Worries about the fiscal cliff continue to drive [international bullion market] sentiment,” says Nick Trevethan, senior metals strategist at ANZ, referring to the combination of tax rises and government spending cuts currently due in the US at the start of January.

President Obama is due to hold talks this week with labor and business leaders to try to build a consensus on avoiding the fiscal cliff.

“That may take some of the steam out of the upside story for gold, but the prospect of negative real interest rates and longer term inflationary risks remain positives for bullion.”.

“The lesson of Europe,” says Congressional Budget Office founding director Alice Rivlin, “is don’t wait until you’re in a crisis to act. Do it now. The other lesson is that austerity is not a good prescription for weak economies.”.

In Europe, the Greek parliament passed its 2013 budget Monday by 167 votes to 128, less than a week after it the Greek government narrowly won a vote in favor of around €13.5 billion of austerity measures.

“Just four days ago, we voted the most sweeping reforms ever in Greece,” said Greek prime minister Antonis Samaras.

Greece may be unable to meet a €5 billion debt repayment that comes due this Friday.

Eurozone finance ministers meet later today to discuss whether Greece should be paid the delayed next installment of its bailout funding, worth €31.5 billion.

The latest report on Greece by the so called troika of lenders – the European Central Bank, European Commission and International Monetary Fund – has been completed, Eurozone finance ministers’ chief Jean Claude Juncker confirmed, although there will be no decision today on whether Greece gets its funding.

“Greece has done what it was asked to do and now is the time for the creditors to make good on their commitments,” said Greek prime minister Samaras.

Greece is hoping to raise funds to cover Friday’s repayment through an auction of Treasury bills tomorrow, the Financial Times reports, although the report adds that Greek banks that would buy the debt can only raise €3.5 billion of collateral to post with the ECB in order to fund their purchases.

Japan’s economy shrank by 0.9% in the third quarter, and 3.5% year on year, according to provisional GDP figures published Sunday.

The Bank of Japan “is committed to continuing with aggressive monetary easing” its governor Masaaki Shirakawa said Monday.

The United States is set to become the world’s largest oil producer by 2017, largely thanks to shale production, the International Energy Agency reports.

Elsewhere in the US, the so called speculative net long position of gold futures and options traders on the Comex – measured as the difference between bullish and bearish contracts – fell for the fourth week running in the week to last Tuesday, weekly data published Friday by the Commodity Futures Trading Commission show.

“[Gold] prices have recently been supported by official sector [central bank] buying,” London Bullion Market Association chairman David Gornall told the LBMA’s annual conference in Hong Kong this morning.

“Will the gap between the amount of gold held in reserve by the developing markets and that of the developed world close?… comparing China to the US, it would seem that in China, gold asset allocation can only go in one direction.”.

“Gold plays a very important role in the formation of the financial market system,” Xie Duo, general director of China’s central bank, told the LBMA conference Monday.

“[There has been] big progress in the Chinese gold market…but there is still a long way to go.”.

The Agricultural Bank of China, one of nine Chinese banks licensed to import gold, has said it plans to start trading precious metals overseas.

“We will start trading globally in the next year or two, most likely in London and New York,” said Wang Xinyou, head of precious metals at AgBank, which currently enables retail investors to buy and sell gold on the Shanghai Gold Exchange.

LONDON (Reuters) – Spain’s “bad bank” will struggle to find buyers for swathes of empty land, unfinished housing projects and doubtful loans left over from a property crash, hindering Madrid’s attempts to overcome the wider economic crisis.

If nationalized banks that transfer assets to the bad bank were forced to provide vendor financing for sales, it would perpetuate the subprime lending that initially got them into trouble.

The firm would probably look to invest when there is a needfor a cash injection after assets are removed into a so called“bad bank,” he said.

SAREB aims eventually to buy up to 90 billion euros ($117 billion) of the assets at deep discounts and then sell them to investors over 15 years.

Buyers are likely to snap up the likes of prime holiday homes and completed properties, commercial and residential, which already have tenants.

Between 60 and 65 percent of the foreclosed property and bad loans to be hived off by the banks will relate to undeveloped land and half built projects, according to forecasts compiled for Reuters by real estate consultants Jones Lang LaSalle (JLL.

CBRE gave the higher figure for this category which investors will probably shun, put off by high risks and costs such as having to rip down abandoned shells of buildings that no one would ever want to occupy.

Together with Ireland, Spain has suffered Europe’s biggest property crash, leaving the banks with 184 billion euros of bad real estate debt and incomplete developments around the country.

“In the last five years there has been virtually no value for land,” said Rafael Powley, a Madrid based director of strategic consulting at JLL.

CBRE and JLL are the world’s biggest property advisers and helped consultant Oliver Wyman prepare a report this year that examined how exposed Spain’s banks were to souring property loans after the bubble burst.

The crash has put Spain center stage in the euro zone debt crisis, now in its third year, as investors believe a high budget deficit, soaring state debts, and a deepening economic contraction will force Madrid to seek more external help.

Spain has already secured up to 100 billion euros of European aid to rescue the banks worst hit by the property collapse.

Madrid may now have to take a full sovereign bailout, with the state assuming the bad real estate assets unless it can find private sector investors to buy stakes in SAREB itself.

Developers buy land, finance real estate deals, build or have builders build projects, create, imagine, control and orchestrate the process of development from the beginning to end.

SPANISH BAD BANK, BANKIA Spain on Monday said it would apply steep discounts to propertyassets transferred into a so called bad bank and pledgedsignificant returns in a move to lure reluctant investors.

The figure would be 63.1 percent for foreclosed assets and 79.5 percent for empty land.

Madrid hopes private investors will own at least 55 percent of SAREB, which was created as a condition of the European aid for the banks and is due to start operating by the end of November.

About two thirds of the assets transferred in an initial wave of 44 billion euros will be loans and the rest foreclosed properties.

Investing in land or half built developments means spending money to start, demolish or complete schemes without any guarantee of selling them or finding tenants.

Investors are reluctant to do this due to the Spanish recession and excessive supplies of property built up during the boom years.

“The money you need to spend upfront takes you backwards,” said Justin O’Connor, chief executive of property fund manager Cordea Savills, which has about 7 billion euros of assets under management in Europe.

Banco Santander SA (SAN) Chief Executive Officer Alfredo Saenz said he has concerns over the transfer price of assets, though they are based on incomplete information.

“The only assets of value in Spain are ones with an income stream attached,” he said.

DEMOLITION COSTSInvestors are particularly wary of sites where incomplete developments will have to be torn down and rebuilt from scratch.

“Land and unfinished developments are about the same thing right now,” said Joe Valente, a managing director at JP Morgan Asset Management JPN.

Buying loans secured against land or unfinished schemes is as unattractive as buying the assets themselves in the short term, particularly given the lower discounts offered by the bad bank, Powley said.

MC), Catalunya Caixa (CX), and NovaGalicia Banco (NCG) to contribute the bulk of the assets to the bad bank.

We wouldn’t expect more than 20 percent of the loans to survive.

Like Cordea Savills, JP Morgan is looking for income producing bargains in the bigger Spanish cities.

Valente is raising equity to buy assets outside of safe markets such as London and Paris, which he believes to be overpriced, but the CBRE and JLL figures show there will be slim pickings.

Only 10 percent of SAREB’s assets will relate to commercial property while housing will account for the rest, both real estate advisers said.

The rest will be financed by state backed bonds given to lenders forced to transfer assets.

The commercial property that goes in will be “medium to poor quality” and not what investors are looking for, Powley said.

N) and private equity groups Lone Star, Cerberus and Apollo are also hunting for Spanish bargains.

They will be attracted to large portfolios of completed housing in areas such as Malaga and Alicante, boosted by Russian, British and German tourists and their proximity to major airports, Powley said.

Areas to avoid due to “a huge oversupply” of housing include Valencia, Murcia and Almeria in southeast Spain, said Patricio Palomar, head of research at CBRE in Spain, who made the bad bank forecast for Reuters.

Loans backed by rented out commercial real estate will be the other bright spot but the fact that the good is so outweighed by the bad renders the 15 year disposal time meaningless, property experts said.

($1 = 0.7705 euros)(Additional reporting by Jesus Aguado in Madrid; editing by David Stamp).

Today, analyst Anand Chokkavelu reports that Bank of America was able to turn in a profitable quarter, though just barely, at an EPS of $0.00.

Bank of America had $16.3 billion in reserves for repurchase claims at the end of the third quarter, up 2 percent from the previous quarter.

Forget that the mortgage business is booming all around, Bank of America lost a gain dwarfing $15.9 billion in lending versus last year because of shuttering its correspondent lending business.

Although many of these moves are good (correspondent lending), B of A, along with Citigroup, is distracted while Wells Fargo and JPMorgan Chase are crushing it on mortgages.

The major US banks, including JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc, all said mortgage operations boosted third quarter profits.

Another $1.6 billion of litigation expenses is a big cloud over B of A that continues to keep shares cheap.

To learn more about why, check out our in depth company report on Bank of America.

The report details Bank of America’s prospects, including three reasons to buy and three reasons to sell.

As the bonds continue to look worse, investors want Bank of America to buy them back.

DE) veteran, as head of Asia Pacific global markets, according to an internal memo obtained by Reuters.

The global markets unit deals in fixed income, currencies and commodities trading, as well as equities trading.

The markets division that Loh will run comprises equities, fixed income, currencies and commodities and Loh’s appointment marks the first time Bank of America’s global markets Asia business has been managed by a single leader.

Loh at different times ran both the global markets and the corporate and investment banking divisions at Deutsche Bank.

Most of the job cuts were in the equities division, with the around 45 cuts in Hong Kong making up 9% of Deutsche Bank’s Asian equities team outside Japan.

Bank of America is seeking to improve cooperation between its own equivalent units across the region with his hiring.

In addition to the title of head of Asia Pacific global markets, a new role for the bank, Loh will be deputy president for Asia Pacific and country executive for Singapore and Southeast Asia, the memo said.

He will start work in December and will join the bank’s executive committee for Asia Pacific.

Almost four stocks fell for each that rose on the MSCI Asia Pacific Index today.

A spokesman for Bank of America Merrill Lynch confirmed the contents of the memo but declined to comment further.

Loh, a Singaporean known as one of the chief architects of Deutsche Bank’s Asia markets business, left in March after 17 years at that firm.

Loh’s appointment comes as Bank of America Merrill Lynch, like many of its peers in the industry, looks to reduce costs and increase the efficiency of its sales and trading businesses by integrating the fixed income and equities divisions under the banner of a single unified markets unit.

He is expected to take on the task of getting a unified markets group to liaise more effectively with the corporate and investment banking business, as falling revenues and trading volumes push investment banks in Asia to try to shrink operations and cross sell products more effectively.

Loh was appointed Asia Pacific head of corporate and investment banking at Deutsche Bank in 2010, a title he held until his departure.

He joined the firm in 1995 and in 2002 became head of the global markets Asia unit that he helped build.

Known for his close ties with the financial institutions of his home country, Loh began his career as an investment officer at the Monetary Authority of Singapore in 1989 and was a non independent director of the Singapore Exchange from 2004 to 2012.

By Shingo ItoTOKYO, Oct 5, 2012 (AFP) – The Bank of Japan on Friday held off fresh easing measures, opting not to build on last month’s boost to its asset purchase scheme but warned the economy faced risks from a deeper global slowdown.

At the meeting, the central bank held its benchmark uncollateralized overnight call rate at 0 0.1 percent and also kept the total size of the stimulus program at JPY 70 trillion with the asset purchases of JPY 45 trillion and the credit facility of JPY 25 trillion.

Last month, the BoJ unveiled plans to boost the fund by 10 trillion yen as pressure increased on the central bank to follow similar moves by its European and US counterparts.

Also, the European Central Bank and the Bank of England stood pat on interest rates, as widely expected.

However, it left the door open to further measures further down the line as it assesses the impact of its latest move on the stuttering economy.

“Regarding risks, there remains a high degree of uncertainty about the global economy, including the prospects for the European debt problem,” the BoJ said.

It was also concerned about, “the momentum toward recovery for the US economy, and the likelihood of emerging and commodity exporting economies simultaneously achieving price stability and economic growth.

South Korea was one of the few developed countries that was able to avoid a recession during the global financial crisis, and its economic growth rate will reach 6.1% in 2010, a sharp recovery from economic growth rates of 2.3% in 2008 and 0.2% in 2009 when the global financial crisis hit.

“Reiterating concerns over a slowdown at home, the BoJ said: “Exports and industrial production have been relatively weak as overseas economies have moved somewhat deeper into the deceleration phase.

It’s very much wait and see with people looking to seewhether the ECB and the payrolls report will be the trigger formore momentum in euro/dollar in either direction,” Nordea’sChristensen said.. The ECB is expected to hold interest rates when it meets onThursday to allow time for new details on the health of the eurozone economy and for Spain to ask for aid.. Also in focus on Thursday was a Spanish debt auction, whereMadrid raised close to 4 billion euros ($5.2 billion) by sellingthree bonds maturing in 2014, 2015 and 2017. Yields fell fromthe previous auction though traders said not enough to boost theeuro.. The dollar was broadly lower, with its index down0.25 percent at 79.752. Data on Wednesday showed alarger than expected increase in private sector jobs while investors also awaited the minutes of theFed’s last policy meeting, where it decided on a new bond buyingscheme.. The BOJ, which only last month boosted its asset buyingprogramme, has been under intense political pressure to offermore stimulus to spur growth and weaken the yen.. Analysts generally expect the BOJ to stand pat at the Oct.4 5 meeting to gauge the effects of its latest easing, butpressure to ease further is expected to continue ahead of itsnext policy meeting on Oct 30.. Japan’s new Economics Minister Seiji Maehara will likelyattend the Bank of Japan’s policy setting meeting on Friday, asource familiar with the matter said.. “It may take a while before the BOJ will actually dosomething.

Hopes for more easing on the heels of the prior BoJ move were slim at best,” said Yutaka Miura, senior technical analyst at Mizuho Securities.”.

Investment banks’ earnings from advice on mergers and acquisitions (M&A), and capital raising via the debt and equity markets is currently in the doldrums.

An investment bank may also assist companies involved in mergers and acquisitions, and provide ancillary services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities.

According to Thomson Reuters, fees from these business lines through year to date September 2012 were $50.1 billion, down 14% from the first nine months of 2011.

It was also the lowest earnings from M&A and debt and equity capital markets since the collapse of Lehman in 2008.

However, fees from bond offerings increased 15% in comparison to the previous period, as companies rushed to take advantage of the lowest fixed income rates in our lifetime.

Hong Kong’s dismal Initial public offering market is the main story in Asian investment banking this year, as an 80% drop in the value of offerings has reduced revenue at banks and forced them to cut costs.

According to the article, Long Term Unemployment And ‘The Pain Ahead,"Big ticket items like housing and autos drive the economy.

The Fed initiated its Quantitative Easing program in the fourth quarter of 2008.

Yet housing starts have been flat since that period; starts were 906 thousand in 2008 and ranged from 554 thousand to 609 thousand from 2009 to 2011.

Auto sales were 13.5 million in 2008, reached a trough of 10.6 million in 2009 and rebounded to 13 million in 2011.

Banks have played a big role in creating the financial crisis crippling the 17 countries that use the euro.

Moreover, M&A advisory may face even stiffer headwinds; when business leaders are struggling with their own companies, they are hesitant to take on the additional risks that acquisitions present.

The Pain Ahead For Bank of AmericaFrom 2009 to 2011, Bank of America’s (BAC) net revenue declined from $119.6 billion to $93.5 billion.

Meanwhile, net income declined from $6.3 billion to $1.4 billion over that same period.

The reductions for the final six months of the year, outlined in a document given to top management, are part of a larger effort to retool Bank of America into a leaner and more focused enterprise.

The plan is designed to make the company take less risk, generate more revenue out of existing customers and use an investment banking operation inherited from Merrill Lynch & Co.

On Main Street, the refocused company will have fewer branches and a smaller mortgage operation, the document shows.

And just as the economy’s vital signs are also in the doldrums, Bank of America has further aligned itself with Merrill Lynch, whose earnings are cyclical in nature.

According to the source, global investment banking fee income fell3.8% in the third quarter of 2012 to $15.5 billion from $16.1billion in the year ago period.

Despite earning the top spot of all investment banks in terms of loan fees ($746 million), results were still down 30% in comparison to nine months ended 2011.

It barred commercial banks, which provided clients with normal savings and checking accounts as well as loans, from underwriting stocks and bonds or otherwise dealing in risky investments.

Coupled with the unending call for a return to Glass Steagall and a separation of commercial banking and investment banking, all signs point to "pain ahead" for Bank of America.

For the avoidance of doubt, we are bearish on the US economy and we are bearish on investment banks whose earnings are tied to the vagaries of the economy.

But he adds that a separation is necessary to prune banks back to a size that doesn’t threaten the entire economy.

The EU wants to reform the banks by separating risky investment activities from everyday banking.

We would advise investors to avoid Bank of America, and investment banking stocks in general, until their revenue and earnings show signs of a rebound.

However, we can expect the income from retaildivisions and wealth management wings to support earnings to someextent, but the downfall of investment banking division would be adeterrent.

Ohio Attorney General Michael DeWine’s website trumpets the latest cash payout by Bank of America: $2.43 billion for alleged misstatements surrounding the bank’s frenzied 2008 acquisition of Merrill Lynch.

For reference, that is almost 1.5 times the $1.7 billion in dividends BoA pumped out last year, including a 1 cent per share quarterly common dividend that works out to a comparatively tightfisted $420 million a year.

Since 2009, WSJ says, BoA has paid, or agreed to pay, $29 billion in settlements related to the financial meltdown.

That’s about 17 times the amount it normally pays per year in common and preferred dividends, making a mockery of any rational payout policy.

Some of these payouts, like the latest, were negotiated by the most expensive lawyers on earth: Class action firms, which specialize in assembling lawsuits in the wake of significant negative news and convincing judges to appoint them to represent all the shareholders who lost money as a result.

DeWine says he expects the lawyers in this case, led by the politically savvy firm of Bernstein Litowitz, will seek $150 million in fees for their work.

(Kessler Topaz Meltzer & Check represented European institutional investors including big pension funds in Holland and Sweden).

That’s about 6% of the payout, and Allison Frankel at Thompson Reuters says she thinks the law firms have earned those fees.

First of all, how hard was it to convince the new management at BoA, led by Chief Executive Brian Moynihan, to hand over another couple of billion dollars to end one of the last significant civil cases stemming from his predecessor Ken Lewis’s bungled tenure.

Remember, the lawyers representing shareholders in this case aren’t just working for investors.

They’re also selling absolution to the companies they are suing, thanks to the enormous power of federal judges to approve class settlements that end forever the possibility of filing a similar lawsuit in the future.

Once the bank has cleaned out its directors and officers insurance policies, the only money left to pay these special dividends — and the lawyers who negotiate them — must come from the bank itself.

Ohio Attorney General Michael DeWine’s website trumpets the latest cash payout by Bank of America: $2.43 billion for alleged misstatements surrounding the bank’s frenzied 2008 acquisition of Merrill Lynch.

For reference, that is almost 1.5 times the $1.7 billion in dividends BoA pumped out last year, including a 1 cent per share quarterly common dividend that works out to a comparatively tightfisted $420 million a year.

Since 2009, WSJ says, BoA has paid, or agreed to pay, $29 billion in settlements related to the financial meltdown.

That’s about 17 times the amount it normally pays per year in common and preferred dividends, making a mockery of any rational payout policy.

Some of these payouts, like the latest, were negotiated by the most expensive lawyers on earth: Class action firms, which specialize in assembling lawsuits in the wake of significant negative news and convincing judges to appoint them to represent all the shareholders who lost money as a result.

DeWine says he expects the lawyers in this case, led by the politically savvy firm of Bernstein Litowitz, will seek $150 million in fees for their work.

(Kessler Topaz Meltzer & Check represented European institutional investors including big pension funds in Holland and Sweden).

That’s about 6% of the payout, and Allison Frankel at Thompson Reuters says she thinks the law firms have earned those fees.

First of all, how hard was it to convince the new management at BoA, led by Chief Executive Brian Moynihan, to hand over another couple of billion dollars to end one of the last significant civil cases stemming from his predecessor Ken Lewis’s bungled tenure.

Remember, the lawyers representing shareholders in this case aren’t just working for investors.

They’re also selling absolution to the companies they are suing, thanks to the enormous power of federal judges to approve class settlements that end forever the possibility of filing a similar lawsuit in the future.

Once the bank has cleaned out its directors and officers insurance policies, the only money left to pay these special dividends — and the lawyers who negotiate them — must come from the bank itself.