BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit - Bloomberg Another take: Bank of America Deathwatch: Moves Risky Derivatives from Holding Company to Taxpayer-Backstopped Depository So the short form: BOA thinks that it's going to get fucked on it's CDS exposure to the euro crisis. CDS's are just crazy-ass unregulated betting that the banks have been doing on the side. So it moved that money over to it's deposit business, which has FDIC backing. Due to the rules on these things, in the event of a failure the derivative business will get first call on any assets, including the roughly $1 Trillion in deposits. That means the FDIC will have to pony up that amount or the average person gets screwed and a panic occurs. The FDIC has next to no assets right now because banks have been failing like champs, so that money is going to directly come from the taxpayer. Also the bank will likely still fail because it was probably going to before this, which will probably lose the job of you or someone you know. Have a nice day.