"Collectively, those reserves are sufficient to cover our realistic estimate of the actual costs we expect to face in the future," the firm said in the memo.
As for the AIG litigation, Bank of America rejects the insurer's "assertions and allegations," said Larry DiRita, a spokesman. "AIG recklessly chased high yields and profits throughout the mortgage and structured finance markets," DiRita said. "It is the very definition of an informed, seasoned investor, with losses solely attributable to its own excesses and errors."