(Reuters) – Bank of America Corp (BAC.N) is asking clients about their coronavirus contingency plans as part of its evaluation process of which deals to underwrite, according to sources.
The additional layer of risk assessment is aimed at helping prevent the bank from losses on deals, like bond issuances, the sources said.
The bank declined to comment.
It comes as coronavirus spreads quickly around the world and is forecast to dent global economic growth. The Institute of International Finance (IIF) downgraded its economic growth forecast for the United States and China on Thursday, while warning that world growth could reach its weakest since the global financial crisis.
Confirmed cases of the illness surpassed 100,000 across the world on Friday as the outbreak reached more countries across the world.
Big banks have been implementing their own contingency plans like staggering shifts, and asking their workforce to test telecommuting systems for the past week.
Effective Monday, Bank of America is splitting its trading staff with about 100 employees working out of the Stamford location, according to another source familiar with the plans.
Equity markets have plunged as uncertainty about how and for how long the pandemic will impact companies and the economy.
The S&P 500 swung wildly this week and the volatility has kept many corporates who would have been interested in raising equity capital on the sidelines.
However, lower interest rates fueled by the Federal Reserve’s emergency rate cut has increased corporate appetite for issuing and refinancing debt. Total debt deals totaled $30 billion in the first week of March compared to roughly $90 billion in all of February, according to IFR data.
Bank of America’s plans to split its trading staff to different locations was a precautionary move, the source said, adding that other business lines were not impacted by the split.
Business Insider previously reported on the bank’s staffing plans, citing an internal memo sent on Thursday to employees of its New York-based fixed income and equities units.
Employees at the company’s headquarters “should continue to come into the office and operate business as usual,” but staff will be banned from moving between the Stamford and Manhattan offices, according to the report.
Other U.S. banks like JPMorgan (JPM.N) divided its team between central locations and a secondary site in New Jersey, while Goldman Sachs (GS.N) sent some traders to nearby secondary offices in Greenwich, Connecticut and Jersey City.
Reporting by C Nivedita in Bengaluru and Imani Moise in New York; Editing by Anna Irrera and Edward Tobin