John Paulson, the hedge fund manager who made billions of dollars betting against subprime mortgages and shorting bank stocks during the past two years, has bought close to 2 per cent of Bank of America in what appears to be a strong endorsement of a bellwether financial institution.

The price of BofA stock nearly doubled in the second quarter – when Mr Paulson purchased 168m shares – making the billionaire investor’s holding in the bank worth $2.2bn as of June 30, according to a Securities and Exchange Commission filing on Wednesday.