Photo: Lisa Du, Business Insider
Brian Moynihan spoke to CNBCs Maria Bartiromo in Davos today, and of course he was touting how increasingly healthy Bank of America looks.You can watch the video below, but Moynihan essentially said what he’s been saying since Bank of America’s strong earnings announcement — we’re seriously cutting spending, we’ve raised much more capital, and we’re going to serve customers better as a leaner company.
Great, but it looks like no one is buying this. According to Dealbook, a group of law professors and activists from a non-profit called Public Citizen sent a 24 page petition to Fed Chairman Ben Bernanke and Treasury Secretary Geithner asking them to consider breaking up and reforming Bank of America (download it here).
In a way, though, isn’t that what Moynihan is saying he’s going to do?
Regardless, obviously Public Citizen doesn’t think Bank of America will downsize enough by itself. Aside from the petition, they also sent a letter to financial regulators co-signed by 19 individuals, including economists and legal scholars, and by Americans for Financial Reform, centre for Media and Democracy, Demos, National People’s Action, neighbourhood Economic Development Advocacy Project, New Bottom Line, SAFER and U.S. Public Interest Research Group. Below is an excerpt from the letter, you can read the whole thing here.
Dear Secretary Geithner, Chairman Bernanke and Acting Chairman Gruenberg,
Recently many questions have been posed regarding the financial condition of Bank of America and several other large and complex financial institutions. If any of these institutions were to deteriorate, it could threaten the U.S. financial system. We urge you to investigate their stability, to analyse potential outcomes in the event of a failure, and to take any actions necessary to ensure systemic stability. The Dodd-Frank Wall Street Reform and Consumer Protection Act charges you with ensuring the stability of the U.S. financial system, and provides you with a broad range of tools to do so.
Issues for investigation include whether the financial institutions:
- are adequately capitalised;
- are solvent;
- are, in their current form,
- excessively difficult to manage or regulate properly due to their size or complexity; and
- are, in their current form, capable of being resolved if necessary.
So yeah, Moynihan will have to do more leg work to convince these guys of Bank of America’s progress. If Maria Bartiromo interviews aren’t cutting it, maybe he should consider American Idol.
Here’s the Bartiromo interview (and e-mail us if you think you know what Moynihan can do to convince America that BofA is OK [email protected]):