Bank of America suffered a major outage, rendering the accounts of thousands of customers inaccessible. This disruption comes a few weeks after Warren Buffett sold 6.2 billion shares of the bank through Berkshire Hathaway, fueling speculation about potential internal fragility at the bank.
Bank of America suffers major system outage
Bank of America, the 2nd largest bank in the United States after JP Morgan Chase, was hit by a major outage this Wednesday, October 2, 2024, preventing thousands of customers from accessing their accounts.
The outage, which affected both the bank's mobile applications and website, was the subject of more than 20,000 reports around 1 p.m. local time, according to Downdetector.
Having problems with Bank of America? Downdetector users have been reporting problems since 12:27PM EDT. https://t.co/GnJkbAdsV1
RT if you're also having problems #BankofAmericaOutage
— Downdetector (@downdetector) October 2, 2024
Thus, some of the 69 million customers of the American bank encountered difficulty accessing their accounts, while another party, despite having access to their accounts, saw a zero balance. This outage would also have affected some bank employees, mainly in the cities of New York, Chicago and Seattle.
The bank said it resolved the problem a few hours later, without specifying the cause.
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This outage is a reminder that using banks exposes us to certain risks, not only related to the use of our money or the insolvency of the company, but also to our dependence on their infrastructure. This contrasts with the Bitcoin blockchain, which does not rely on any intermediary and has operated without interruption for several years.
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A breakdown just weeks after Warren Buffet's sales of Bank of America shares
This breakdown, which may seem trivial, is, however, the subject of speculation regarding the recent sale of 150.1 million shares of Bank of Americafor $6.2 billion, carried out between July and September 2024 by Berkshire Hathaway, the investment company led by Warren Buffett.
Some netizens suggest that Warren Buffett may be aware of internal difficulties at the bank, which would have prompted him to reduce his exposure. However, Berkshire Hathaway remains one of Bank of America's largest shareholders, with its stake reduced to 11.4% from 13.33% previously.
This sale is part of a series of divestments from Berkshire Hathawayincluding several companies like Apple, for a total of around $90 billion in the first half of 2024.
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Warren Buffett probably adopts a more cautious management strategy in the face of valuations considered high. Indeed, with rising interest rates, banks become less attractiveespecially when investments like Treasury bonds offer returns close to 5%.
Indeed, although the Federal Reserve (FED) recently began lowering its key rates, Warren Buffet likely expects interest rates to be higher overall than in previous years.
Moreover, Buffett expressed disappointment with some banks' portfolio managementparticularly after the collapse of several regional banks since March 2023.
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Sources: CNN, Fortune
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