Handelslatt Exclusive

Bank of America CEO Calls for Changes to Volcker Rule

The CEO of America's second-biggest bank has little reason to be afraid of the future. Picture Source: Reuters

The chief executive of Bank of America, Brian Moynihan, told Handelsblatt in an exclusive interview on Thursday that the time was right to introduce changes to the substantial regulations that were passed in the wake of the financial crisis in order to allow banks to extend their lending capabilities and promote economic growth.

“There is general agreement that we need to address the Volcker rule,” Mr. Moynihan said in reference to a rule that restricts banks in the United States from making speculative investments, also known as proprietary trading.

But Mr. Moynihan, who is at the helm of America’s second-largest bank by assets, stopped short of calling for a complete revision of the Dodd-Frank Act, the overarching financial reform introduced to improve accountability in the industry.

“Dodd-Frank should not be abolished,” the chief executive said. “But we have to get the regulation right within this framework,” he explained, adding that different interpretations by regulatory agencies hiked costs for banks.

The new U.S. administration appears sympathetic to Wall Street’s concerns, with Steven Mnuchin, its new treasury secretary, floating the idea of amending Dodd-Frank.

For the 57-year-old Bank of America head, the future under the new administration is bright. “People in the U.S. are very enthusiastic, the optimism is palpable,” he said.

Mr. Moynihan brushed aside concerns of a renewed upheaval following the easing of regulatory requirements. “At the moment we just do not know what could cause a future crisis,” he said. “All I know is that the resilience and strength of large banks has increased a lot since the financial crisis.”

While Bank of America grew through large acquisitions ahead of the financial crisis, Mr. Moynihan ruled out such plans going forward, saying the lender would instead focus on organic growth. “We will not do any deals in the foreseeable future,” he said. “If we would do an acquisition it would get in the middle and mess things up.”

Read the full interview in Handelsblatt Global.

Daniel Schäfer is head of Handelsblatt’s finance pages and is based in Frankfurt. To contact the author: dschaefer@handelsblatt.com

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