Bank of America

Hedge fund billionaire John Paulson sold out of Bank of America and Citigroup in the fourth quarter of 2011, missing the sharp rally enjoyed by bank shares year-to-date.

Bank of America shares surged almost 6% on the opening bell on Wall Street after the bank posted net income of $2bn for the fourth quarter of 2011, despite its investment banking arm booking a loss.

Barclays was among six global banking groups to be downgraded by Fitch last night, with the ratings agency pointing to challenging financial markets.

Standard & Poor's has downgraded a raft of US and UK banks including HSBC, Barclays, and Goldman Sachs following an overhaul of its ratings criteria.

The cost of insuring against a default by Bank of America reached a new high yesterday as investors' fears over US exposure to the European debt crisis deepened.

The Federal Reserve plans to stress test six major US banks against market shocks, as part of an annual review of bank health.

Bank of America is planning to issue new shares in exchange for existing preferred stock and debt that has lost value during the downturn this year.

Wall Street's biggest banks had their worst quarter of results since 2008's financial crisis, with trading revenue down 35% on last year.

Negativity towards European and UK markets has eased as investors rotate their portfolios away from emerging markets in favour of the more developed nations, according to a fund manager survey.

The US is planning to sue more than a dozen major banks for misrepresenting the quality of mortgages they sold during the housing bubble, the New York Times reports.