Buffett’s Berkshire seeks Fed leeway to boost BofA bet: Bloomberg

FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott Morgan

(Reuters) – Warren Buffett’s Berkshire Hathaway Inc is seeking permission from the Federal Reserve to boost its stake in Bank of America Corp above the 10% level, Bloomberg reported on Tuesday.

Shares of BofA were up 3% after the report came out.

Berkshire, which has a 9.96% stake in BofA, filed an application with the Fed in recent weeks making a variety of assurances that it will passively invest in the bank, the report said bloom.bg/2ISBQEW citing a copy of the application provided by the regulator.

Ownership above the 10% level attracts increased regulatory scrutiny and the Federal Reserve only allows investors to take double-digit stakes on the assurance the buyer would not try to force a controlling influence.

Berkshire’s biggest stock market commitment remains in financial services — it is the largest shareholder in American Express Co, Bank of America Corp and Wells Fargo and has a significant stake in JPMorgan Chase & Co.

In 2017, Berkshire pulled reut.rs/2MIl8cn a similar application to boost its stake in Wells Fargo after the bank was beset by a scandal over its creation of unauthorized customer accounts.

Bank of America is slated to report its third-quarter results on Wednesday.

Reporting by Bharath Manjesh in Bengaluru; Editing by Shinjini Ganguli

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