Brian Moynihan has proven once again why he's the unlikely hero of megabanks in these most uncertain of times. At the Bloomberg Breakaway Summit in New York Wednesday, the Bank of America chairman and CEO addressed the bee that's been buzzing in Wall Street's collective bonnet over the past few days: Donald Trump's surprise comment that he may be looking at kind of sorta breaking up the big banks.
Asked about the incendiary-if-totally-dubious remarks, BriMo could have easily punted the question. He could have gestured toward the legislative process or just whimpered. Instead, he launched into an eloquent, minutes-long apologia for the universal bank that sent shivers through the room and approached what, for Moynihan, was essentially poetry:
It's not in America's best interest – it would not be America's interest to break up the large banks. Because what you would end up is a couple possibilities. One is a system that was in place when we had the real problems with the unregulated entities that didn't have the liquidity and capital.
So what's better to have: Merrill Lynch standing alone or tucked inside? Tom Montag does a wonderful job in our trading business. We have $30 billion of our $170 billion in capital. It's less than a third of our balance sheet. We actually can stabilize it in times of stress. That's a much better situation.
But most importantly in all this is our ability to serve. Even midsize companies are involved in…the global environment, as well as large companies…. These companies all sell overseas, potentially manufacture overseas, import from overseas…whatever it is, they need companies like ours to help them figure that out – to pay their employees, to collect their cash, make efficient use, to raise financing, to understand the rules. It just takes large banks to do that.
One of the things I think America has that makes us very strong is a strong financial services industry that leads the world in capabilities. It'd just be crazy to go backwards from that.
Here Moynihan took a moment to genuflect before the gods of community banking with some requisite overtures toward regulatory relief for America's beloved small-town lenders. But it only took a moment for him to return, almost breathlessly, to his central theme: the awesomeness that is Bank of America.
I just think it's not the right thing. It's not good for the country, it's not good for the economy. It's kind of yesterday's news. We can't go back to a system of banking when the economy was 10 percent of its size and the world wasn't global and the final demand for customers was all in America for American companies. It just doesn't exist anymore. So that's the thing.
The reaction to it is, think of who I am. I'm a banker. I've had people say far worse things about us over the last nine years. If you believed everything people said…and they start here and end up there and come back and forth…but it's uh…we have a great company, a great set of teammates, great clients, that actually give us a, you know, a reason to be here that, uh, you know. We'll be fine.
Apologies if we didn't warn you about getting a little verklempt reading this.