The bank's management is focused on not being an outlier compared to its peers and believes it has "viable alternatives" to increase its capital levels, a person familiar with the situation told Reuters.

The bank, for example, could consider selling its Indian back-office processsing operation, as other banks have, sources said. The bank has also said it is looking to shed real estate holdings and private-equity investments.

But after about $50 billion of asset sales since January 2010, which include sales such as most of its shares in China Construction Bank Corp , the bank may not have many big-ticket items left. )

With one analyst saying the bank may need $45 billion of additional capital by 2019, it may have to start cutting deeper into its franchise. That would mean shedding more significant businesses, such as parts of the investment bank or the Merrill Lynch brokerage. The bank can also improve its capital measures by retaining profits and running off risky loans, but those steps will take time.

The bank declined to comment on specific asset sales.

The question of how much capital the second-biggest U.S. bank will eventually need to raise is a key concern that is rattling investors. Bank of America, which had to be bailed out by the U.S. government during the financial crisis of 2008, has remained one of the weakest in the industry.

For the last two years, Chief Executive Officer Brian Moynihan has worked to gradually streamline the company and build capital, but investors have been disappointed with the speed of a turnaround.

While the bank, like other financial firms, has suffered from a sluggish economy and concerns about the European debt crisis, it has also incurred self-inflicted wounds, including a now-canceled plan to charge customers a $5-per-month debit card fee.

Bank of America's shares are down 58 percent this year and closed below $5 on Monday for the first time since March 2009. In comparison, the KBW Bank Index is down 23.5 percent this year. The bank's shares on Friday closed at $5.60, up 2.4 percent amid a broader rally in the stock market.

Some analysts say the bank may have to take more dramatic steps, which could range from shaking up its management to breaking up the company.

"You have had nothing but bad news come out of the company for two years," said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. "At some point, the directors on the board have to say, 'Is it systemic or the result of management?'"

Moynihan's team faces a slew of challenges in the coming year. Next month, the bank has to submit a capital plan to regulators that will lay out whether it aims to raise its dividend or buy back more stock.

The bank, along with four other large lenders, also has potentially damaging and expensive legal challenges. It is working to reach a settlement with state attorneys general and federal officials over a long-running investigation of foreclosure practices.

At an investor conference this month, Moynihan said the bank's capital levels are now at an all-time high and that asset sales and other actions in the fourth quarter of this year will further boost those measures. The company will continue to "drive high-quality capital growth" and to "shed non-core assets," he said.

NEW CAPITAL RULES

Moynihan will be under pressure to show that Bank of America is up to the challenge of meeting proposed new capital rules and improving returns for shareholders.

Banks have until 2019 to fully meet international capital rules, with requirements stepping up between now and then. But most of the biggest U.S. banks expect to meet the 2019 rules much sooner.

JPMorgan Chase & Co CEO Jamie Dimon has said his bank could meet 2019 requirements by the end of next year. Citigroup Inc CEO Vikram Pandit has signaled his bank is heading toward that mark, and Wells Fargo & Co CEO John Stumpf has said his bank is "probably closer than any of the big banks to whatever that number needs to be."

Moynihan, meanwhile, has only said his bank will exceed the 2012 rules when they come into effect and meet the new standards within regulatory guidelines.

"They're pulling all the triggers they can, but it takes time to work through," Marty Mosby, an analyst with Guggenheim Partners, said of Bank of America.

Mosby estimates Bank of America might need up to $45 billion in capital to meet the 2019 rules, which could take the bank four years to accrue through earnings.

In a report this week, analysts at research firm CreditSights also said Bank of America was not likely to meet 2019 standards by the end of 2012. Regulators are still working to finalize the rules and how they will be implemented.

In March, the Federal Reserve denied the bank's request to increase its quarterly dividend from a penny per share, while allowing other banks to hike their payouts and buy back stock.

Starting in January, the Federal Reserve will begin subjecting large banks to another round of stress tests that are designed to make sure banks have a sufficient capital cushion to withstand an economic downturn and severe market shocks. The results will determine whether they can return more capital to shareholders.

Analysts suspect it could take some time for Bank of America to receive regulatory approval to boost its dividends, or buy back a significant number of shares.

Moynihan has long insisted Bank of America doesn't need to issue new stock to raise capital, a move that would dilute the holdings of current shareholders.

But in August, he agreed to accept a $5 billion investment from Warren Buffett's Berkshire Hathaway Inc, which included the right to buy 700 million shares of common stock in the future. The bank has also issued 400 million in common shares as part of a stock swap that boosted capital.

BOLDER MOVES

Other analysts say the bank's board should be considering bolder strategic moves.

"A question a serious board should ask is, 'Do we want to one of the top four banks?'" said Tom Brown, chief executive of hedge fund Second Curve Capital, citing additional capital requirements and limits on acquisitions.

Moynihan has consistently said the bank's strategy of marrying a large consumer bank with a large corporate bank is working. The bank's Merrill Lynch financial advisors, for example, can refer wealthy business owners to the commercial bank. And affluent consumers can be steered to Merrill Lynch for investment advice.

Many of the Charlotte, North Carolina-based bank's problems stem from the 2008 purchase of Countrywide Financial under Moynihan's predecessor, Ken Lewis. Bank of America paid $2.5 billion for the mortgage lender in 2008, but has since suffered more than $30 billion in losses from bad loans, mortgage-backed securities claims and lawsuits linked to the company.

On Wednesday, Bank of America agreed to pay a record $335 million to settle civil charges that Countrywide discriminated against minority homebuyers.

Moynihan has moved the bank's troubled mortgage assets into a separate unit and worked to settle lawsuits and other mortgage-related claims. But some analysts and investors have questioned whether the bank should bankrupt Countrywide to protect the rest of the company from its liabilities.

"We always have options but ... we've got to move through this in a way that doesn't disrupt the company," Moynihan said when asked about the possibility at the investor conference earlier this month.

Bank of American's chairman, former DuPont Co CEO Chad Holliday, has said privately that Moynihan has