Magazine article American Banker

Moynihan Urges Broad Reforms, More Lending

Magazine article American Banker

Moynihan Urges Broad Reforms, More Lending

Article excerpt

Byline: Paul Davis

RALEIGH - Brian Moynihan used his first public address as chief executive of Bank of America Corp. to call for changes in how the banking industry does business and for more lending.

Speaking Monday to a near-capacity crowd at the North Carolina Bankers Association's annual economic forecast luncheon, Moynihan outlined several challenges facing the banking industry and portrayed B of A as being on the forefront of confronting them. He cast so-called clarity commitments for the company's credit card, mortgage and deposit products as a way of better describing terms and fees to customers.

In capital markets, Moynihan called for reforms in areas such as derivatives trading, securitizations, compensation and rating agencies. Though he offered no specific plans, he emphasized a need to "balance safety and soundness with innovation." Finally, he said the banking industry must accept higher capital and liquidity requirements.

"The key lesson here is 'never again,' " Moynihan said, referring to the near-meltdown in 2008 that led the government to infuse billions of dollars into Bank of America and other financial companies. (B of A repaid its $45 billion in funds from the Troubled Asset Relief Program last month.) "We can never again get our company or our industry in this position."

Yet he argued that big banks should be kept intact. "The ability to combine a commercial banking business with global investment banking and capital markets capabilities is important to us for one specific reason: It's important to our clients," he said. "The more capital-raising options we bring to the table for clients, the better solutions we can provide to help them grow."

Moynihan, who succeeded Kenneth Lewis on Friday, briefly discussed industrywide declines in lending and called reports that banks are not lending "upsetting. …

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