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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Now I want to take you over to the Economic

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Speaker 2: Club of Washington, where I'm pleased to say that David Rubinstein,

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Speaker 2: the Carlisle co founder and host of Pets to Pair

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Speaker 2: Conversations on bloombag TV, is joined by good front of

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Speaker 2: this program. The Banks America CEO Brian moynihan.

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Speaker 1: Let's take a listen. There's a lot of burden upon

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Speaker 1: the banking system to both report suspicious activity reports and

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Speaker 1: do a lot of analysis, and we have to close accounts.

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Speaker 1: We can't tell people why we did it, and often

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Speaker 1: we're told by authorities to close accounts. That creates confusion.

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Speaker 1: Another area comes up in this discussions in a crypto

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Speaker 1: area were the regulator said you can't bank crypto operating companies,

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Speaker 1: employees of crypto companies, etc. We are allowed to do

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Speaker 1: We bank everybody but the operating company. They said, that's

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Speaker 1: a high risk activity. Ask us for authority and guess what,

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Speaker 1: you would have never gotten the authorities. So that came

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Speaker 1: up as issue. So at the end of the day,

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Speaker 1: it's about getting these regulations right now. I think it

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Speaker 1: opens a dialogue about how to get these regulations correct,

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Speaker 1: and the end of the day, we were open for everybody.

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Speaker 1: We serve millions and millions of Americans trallions and transactions

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Speaker 1: a year, and we continue to do so.

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Speaker 3: Okay. So when this administration was elected, there was a

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Speaker 3: lot of i would say, jubilation in the streets the

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Speaker 3: banking where all people thought that the banking regulation had

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Speaker 3: been too tough. Under President Biden, some people thought that

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Speaker 3: regulation would be more amenable to banks. Has that turned

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Speaker 3: out to be the case, shat, or it's still too

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Speaker 3: early to know, and is the Banking Committee happy with

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Speaker 3: the direction that the current administration is going, or you

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Speaker 3: just don't know yet.

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Speaker 1: So you have to start people sort of step back

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Speaker 1: and say the regulation, the regulation of banking has been

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Speaker 1: always been true since our charter or was part of

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Speaker 1: a bank was some seventeen eighty four. So we've been

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Speaker 1: regulated from that day forward. If you think about the

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Speaker 1: Great Financial Crisis and Dodd Frank and a lot of

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Speaker 1: capital rules and quite rules and all that stay came in,

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Speaker 1: there was a reason for the world wh at large

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Speaker 1: really not happy with banks in a way, and non

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Speaker 1: banks that became banks. Golden sax Morgan, Stanley, MARYLANDT cetera.

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Speaker 1: So you could understand that when you go fast forward

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Speaker 1: through the fifteen years hence plus, you go through the

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Speaker 1: pandemic and the banking system stands up and stabilizes the economy.

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Speaker 1: You go through the regional banking crisis, the banking system

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Speaker 1: steps up and stabilize it, and they keep adding capital

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Speaker 1: and LIQUIDI you're sort of saying, wait a second. You know,

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Speaker 1: we are a source of strength. And by the way,

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Speaker 1: the American bank industry is really a source of strength.

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Speaker 1: So the penlan kept just swinging even though the reason

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Speaker 1: why it had swung had stopped. And so our industry

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Speaker 1: was say, wait a second, why are we have twenty

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Speaker 1: percent more capital and we did during the pandemic. The

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Speaker 1: risk is the same. It's just by mathematical creep of calculations.

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Speaker 1: Why are you saying we're going to limit your fees

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Speaker 1: charged for certain activity or demon activity alone when it

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Speaker 1: wasn't alone, and with one hundred years of history saying

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Speaker 1: an overdraft is alone, somebody just says, I want to

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Speaker 1: make it alone. And so this idea of the regulators

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Speaker 1: sort of imposing new rules and regulations that Congress did

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Speaker 1: not intend actually was kind of an interesting question, right.

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Speaker 3: So many people when they talk about the Federal Reserve,

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Speaker 3: they wonder whether the Fed are going to increase interest

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Speaker 3: rates or decrease interest rates. But in the banking community,

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Speaker 3: you're often worried about.

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Speaker 1: The stress tests.

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Speaker 3: And do you think the FED has pushed stress tests

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Speaker 3: to two tough a limit on banks? Or are you okay

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Speaker 3: with the current stress tests?

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Speaker 1: It's so the stress tests are publicly available were I

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Speaker 1: think the first one was twenty ten and then picked

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Speaker 1: up an earnest eleven or twelve, and so every year

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Speaker 1: you can see this report card in the bank industry's health,

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Speaker 1: and every year the bank industry has great health. But

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Speaker 1: the issue we got in the bank industry ended up

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Speaker 1: suing the FED was behind the scenes that the rules

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Speaker 1: kept changing the test. So if you think of the

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Speaker 1: last four or five years, you had volatility and capital

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Speaker 1: requirements that were went from fifties seventy five basis points

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Speaker 1: up and down a year with basically tests that said

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Speaker 1: ten percent employment, fifty downturn in the equity markets, thirty

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Speaker 1: percent drop in housing, thirty to forty percent drop in

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Speaker 1: commercial real estate. Uh, you know, high yield spreads blowed

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Speaker 1: out by a thousand two thousand basis points. Whatever it was,

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Speaker 1: you look at all it the same test produced as

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Speaker 1: different results. It didn't make sense. So behind the scenes,

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Speaker 1: the transparency wasn't there, and that's what we end up

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Speaker 1: suing them on. So the stress tests are a very

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Speaker 1: good thing. Frankly gives us state of health for thirty

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Speaker 1: one banks, which cover most the industry. The way the

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Speaker 1: United States run was far superior. We do stress tests

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Speaker 1: every quarter, multiple scenarios, and you know, our trading book

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Speaker 1: is stressed every day. So if you think about it's

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Speaker 1: a good thing, it's just behind the scenes. What was

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Speaker 1: happening is that dials were being turned on us and

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Speaker 1: the numbers were becoming irrational to the market, and we

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Speaker 1: have investors and we have to raise capital and have

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Speaker 1: capital available for the industry.

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Speaker 3: So there was somebody there's a vice chairman of the

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Speaker 3: Federal Reserve who's in charge of regulating the banks and

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Speaker 3: so forth. That person has given up that position recently,

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Speaker 3: and was that something in the banking community was happy

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Speaker 3: with that he stepped aside or you didn't really care

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Speaker 3: whether he stepped aside or not.

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Speaker 1: Well, at the end of the day, is I think

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Speaker 1: he had a year left on his term in the

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Speaker 1: new administrator president, who would point someone for that position.

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Speaker 1: We'll get it today. We're as when people always ask me,

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Speaker 1: do you have different approaches for different administrations, and you say, well,

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Speaker 1: in the long term, we've been around since Washington was president.

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Speaker 1: So if we geared ourselves up for this president, not

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Speaker 1: that present, we'd have to change forty five times whatever

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Speaker 1: it is. And if you think even of in the

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Speaker 1: form soil, think how many different prime ministers there's been

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Speaker 1: in England or so even in my tenure CEO. So

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Speaker 1: the end of the day, you run the company the

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Speaker 1: right way, and what we're trying to say is get

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Speaker 1: us to rationalatory structure that and have it stick to

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Speaker 1: the ribs. If you keep swinging like this, our clients

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Speaker 1: can't be it can't depend on us. When eighty is so, before.

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Speaker 3: The Great Recession, there were a number of large banks

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Speaker 3: the United States and Europe and Asia. And now it

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Speaker 3: seems as if the Great Recession and post COVID, the

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Speaker 3: United States is dominating the global banking world. What happened

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Speaker 3: to the European banks? So they're not really competing with

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Speaker 3: you and JP Morgan and well as Fargo, as much

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Speaker 3: as they used to. What happened What are the American

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Speaker 3: banks doing that enabled them to become so much not

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Speaker 3: so dominant in the banking world.

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Speaker 1: The American banking system is probably a story as much

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Speaker 1: of American capitalism being successful because the odds the banks

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Speaker 1: in the country, the banks in the country, or the

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Speaker 1: banks represent the size, scale, and scope in the vibrancy

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Speaker 1: of that economy. So what happened from pre financial crisis

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Speaker 1: now is at that time you and I have been

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Speaker 1: sitting here talking about how China's economy is going to

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Speaker 1: be bigger in the United States in the very like

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Speaker 1: by now the European economy was as big and was

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Speaker 1: going to outgrow the United States under the enthusiasms the

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Speaker 1: U framework. And guess what were one and a half,

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Speaker 1: one three quarters times the size economy back then? You're

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Speaker 1: like point one or whatever it is. So we've outgrown.

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Speaker 1: That's part of the vibrancy. And frankly, dealing with the

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Speaker 1: financial crisis, recapitalized industries, failing, a bunch of company industry participants,

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Speaker 1: bringing people into the tent the right regulations, and then

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Speaker 1: going forward. And so what's happened is Europe is not

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Speaker 1: kind of crawled out economically. Therefore, the banking system has

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Speaker 1: been hamstrung. At the same time.

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Speaker 3: Now you've been the CEO for fifteen years, and the

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Speaker 3: bank has covercovered from a lot of problems that had

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Speaker 3: when you took over. You've got a great career. Suppose

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Speaker 3: the President of United States said next year, I need

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Speaker 3: a new chairman of the Federal Reserve Board, and you've

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Speaker 3: been running Bank of America. Why don't you come in

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Speaker 3: and be chairman of the Federal Reserve Board. Your response

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Speaker 3: would be.

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Speaker 1: I think, I say, talk to David Rubinston. I don't

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Speaker 1: think so. I'm sorry. So our company an end of day. Yeah,

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Speaker 1: I get up every morning and I've got teammates out

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Speaker 1: here in the audience, and this team is unbelievable. And

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Speaker 1: if you see what we do for a customer, and

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Speaker 1: my emails and the public demand customers send me when

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Speaker 1: we're doing great things for him, and when we're not

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Speaker 1: doing great things for him, come directly to me. Nobody

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Speaker 1: reads about me. And so if you see what we

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Speaker 1: can do for a company, for individual, you see the

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Speaker 1: enthusiasm for young kid who's open an account, enthusiasm for

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Speaker 1: the four or five thousand kids we hire between eighteen

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Speaker 1: and twenty two that come into our company every year.

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Speaker 1: The communities that we support, that just does a great job.

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Speaker 1: And I love doing it as long as I'm healthy,

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Speaker 1: as long as I have the energy, as long as

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Speaker 1: you know, the team in the board support good.

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Speaker 3: So recently another banker you probably heard of, Jamie Diamond,

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Speaker 3: and he testified on Capitol Hill that maybe the regulators

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Speaker 3: and Congress should get together and say, let's just start

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Speaker 3: afresh and take a look at all the banking regulations

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Speaker 3: from a fresh perspective, building from scratch. Do you have

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Speaker 3: a comment on that.

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Speaker 1: Is that a good idea or well, I think this

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Speaker 1: spaghetti chart of overlap is a question. So it just

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Speaker 1: take the Consumer Bureau. In two thousand ten U with

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Speaker 1: Dot Frank ten or eleven, they set up the Consumer Bureau.

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Speaker 1: The theory was that all the consumer regulatory activity would

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Speaker 1: move to a new agency. Guess what, we still have

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Speaker 1: the occ regulars Consumer Activity stud, the Federal Regulars Consumer

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Speaker 1: Activity stud. The FDC will hit consumer activity on occasion,

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Speaker 1: and you have the Consumer Bureau. And if you have

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Speaker 1: the FDIC as regular, you have the FDIC. So none

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Speaker 1: of that happens, so you end up with another added

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Speaker 1: regular it much like after nine eleven HIHS came in

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Speaker 1: and it was supposed to swoop everything in and it

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Speaker 1: didn't quite happen that way. So I think you could

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Speaker 1: start with a fresh sheet of paper recognizing that in UH,

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Speaker 1: you know, the the National Banking Act in the eighteen hundreds,

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Speaker 1: so whether the Federal Reserve Act and the FDIC Act

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Speaker 1: in the thirties, the world has changed a lot since then,

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Speaker 1: and so you know, the idea of national reglatory UH consolidation,

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Speaker 1: even on a dynamic country like the United States, is

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Speaker 1: probably more appropriate today than it was when you had

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Speaker 1: ten fifteen thousand banks, all the stry beat it all

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Speaker 1: over and Tom Barkin's coming from the Richmond Fed. Tom

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Speaker 1: is terrific, But there was a day when everything went

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Speaker 1: on in Richmond and the Richmond Fed catchment basin was

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Speaker 1: only there that day.

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Speaker 3: Is you're regulated by the Federal Reserve, the FDICE, the

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Speaker 3: Comptrol of the Currency, and anybody else, the.

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Speaker 1: Consumer Bureau, the SEC, the CFTC. Then for this way,

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Speaker 1: there's one hundred plus regulars in our building every day.

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Speaker 3: So do you spend a lot of time with the

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Speaker 3: regulators or you try to avoid that.

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Speaker 1: I'd like to spend time when they're telling us we're

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Speaker 1: doing good stuff, but no, I spent We all spent

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Speaker 1: a lot of time on I great chief risk officer

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Speaker 1: and Jeff Greener who organized that for the company. All

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Speaker 1: my senior executives spend time with him, and look the

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Speaker 1: day to day regulators are helped trying to help us

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Speaker 1: be better, and we understand that we are on the

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Speaker 1: road to perfection as a company. And fincel Party said

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Speaker 1: you strive for perfection next since we found that's which

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Speaker 1: I do. If they've got ideas for all ears, simplifying

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Speaker 1: the organization will allow frankly, cost to be taken out

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Speaker 1: from the regatory side, and we pay fees to support it,

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Speaker 1: and it wouldn't be the worst idea.

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Speaker 3: Now. When interest rates go up, the theory is that

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Speaker 3: banks can charge more for loans and therefore their more profitable.

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Speaker 3: And banks have been very profitable in recent years. When

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Speaker 3: interest rates go down, is that a concern to banks

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Speaker 3: because you're less profitability or you really don't care well?

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Speaker 1: The toughest time to be a bank with a trillion

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Speaker 1: two trillion dollars deposits is when interest rates are zero

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Speaker 1: because we have we can't charge people to store their money.

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Speaker 1: It's it's we're not like a self storage unit or

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Speaker 1: something like that. So the end day you have a

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Speaker 1: floor on interest rates, and so when interestrates came down,

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Speaker 1: you start squeezing margins. So the loan rates came down,

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Speaker 1: but the deposit rates have a zero floor. When rates

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Speaker 1: move up, that changes and so the zero just checking accounts,

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Speaker 1: all that stuff become worth more and the loan rates

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Speaker 1: go up. So as long as the rate structure is

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Speaker 1: more normal, and you know, anybody there in the age

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Speaker 1: of forty has never seen a real rate structure except

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Speaker 1: for like right now. Yeah, they're they're if the probably

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Speaker 1: a little older than that now. And so the idea

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Speaker 1: of a three percent fed fund rate isn't high rates,

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Speaker 1: it's the usual rate. In fact, on the lower side,

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Speaker 1: a four and a half percent tenure the usual rate.

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Speaker 1: And so in that environment banks will make money. But

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Speaker 1: the end of the day, the NETS's margin, which is

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Speaker 1: the difference between what we lend at and what we

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Speaker 1: pay for funds, tends to run two hundred and fifty

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Speaker 1: basis points in that benefit goes back to the depositor

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Speaker 1: side and to the debtholder side, and as rates go

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Speaker 1: up and the ups and downs, it's just what hits

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Speaker 1: that floor. That margin got down to one fifty or

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Speaker 1: something like.

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Speaker 3: That because interest rates come down, though you're not it's

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Speaker 3: not going to affect your profitability, not a lot, because

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Speaker 3: you have right So you don't want Jpale's job. It

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Speaker 3: sounds like, but suppose he called you and said, should

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Speaker 3: I increase interest rates? Decrease interest rates are holding the same?

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Speaker 3: What would your advice be.

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Speaker 1: Our team right now is basically says there'll be no

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Speaker 1: further rate cuts through their forecast period, which is this

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Speaker 1: year next year. And they were one of the first

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Speaker 1: people to pull that off the table, and they did

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Speaker 1: because they said, inflation is coming down, but is a

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Speaker 1: bigger fight. An there's the dual mandate, employment, inflation, employment.

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Speaker 1: They're in great shape on inflation. It's been coming down,

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Speaker 1: it's working this way down. It takes multiple years to

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Speaker 1: squeeze inflation out. They started in twenty two and so

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Speaker 1: think of you know, twenty six is actually a normal

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Speaker 1: period to squeeze it out. And there's a drag on

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Speaker 1: economy today and so you're seeing economic growth from three

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Speaker 1: percent in the last couple of quarters to two percent.

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Speaker 1: We haven't moved down to two percent, so he shouldn't

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Speaker 1: our expectations. They won't cut rates. I think we have

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Speaker 1: the little rest of the year. Yeah, for the rest

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Speaker 1: of the year, in the next year and frankly until inflations.

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Speaker 3: And okay, so let me ask you. The business that

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Speaker 3: my firm has been in is private equity. But now

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Speaker 3: private equy firms have become private credit firms as well.

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Speaker 3: And private credit firms they lend money, but they're not

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Speaker 3: regulated quite the way you are. So is that a

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Speaker 3: source of concern that we can lend money and we're

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Speaker 3: not as highly regulated as you are, and you're lending

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Speaker 3: money but you're highly regulated, or you don't care about that.

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Speaker 1: You know, I think I care about your firm. But

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Speaker 1: look in the private capital has grown because they can

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Speaker 1: do something we can't. Along a couple dimensions. One is

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Speaker 1: they can finance companies that may have more leverage, and

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Speaker 1: we are basically stopped out at six times leverage. And

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Speaker 1: that used to be a rule that it was taken

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Speaker 1: back then it was a guidance and then it was

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Speaker 1: like wait too, we examine you so and we do

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Speaker 1: go above it for certain credits and stuff like that.

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Speaker 1: So that's one thing. The second thing is the ability

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Speaker 1: to bring the whole capital structure, debt, equity, the mezzanine,

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Speaker 1: whole nine yards. That's hard for a bank because we

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Speaker 1: don't engage yet business. But on top of that, you know,

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Speaker 1: we we have a trillion dollars a commercial loan commitments,

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Speaker 1: a half a billion plus of drawing loans. We don't

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Speaker 1: fear any competitor, and we work with those companies, including yours,

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Speaker 1: to generate assets for them. But it's just a different style.

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Speaker 1: I think the world should be concerned and make sure

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Speaker 1: that those enterprises making loans to you know, billion dollar

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Speaker 1: operating company have the ability to work with the times

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Speaker 1: of stress. That that's going to be a interest question.

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Speaker 1: We haven't gone through a stress period with this practice

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Speaker 1: out there.

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Speaker 3: I think JP Morgan, maybe other banks. Maybe you have

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Speaker 3: gone out and raised private credit funds that you can

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Speaker 3: then lend out without the normal constraints that you have

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Speaker 3: the money you have from the positors. Is that something

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Speaker 3: you've done or you think it's a good idea.

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Speaker 1: We've created some some capacity. In the end, the credit

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Speaker 1: we like we're willing to do is important as much

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Speaker 1: as we can, so we have you know, we're dying

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Speaker 1: for more loans. We have two trillion dollars of positive

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Speaker 1: to trillion dollars loans. We're trying to do all the

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Speaker 1: loans we think have good out of quality and so

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Speaker 1: we don't feel this constraint.

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Speaker 3: Let's talk about in your background. I am an only child.

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Speaker 3: You have how many siblings?

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Speaker 1: Seven?

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Speaker 3: Seven? So you know growing up with eight people in

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Speaker 3: the family. Wasn't that crowd at a time?

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Speaker 1: Sir? I'm trying to think I didn't have I was

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Speaker 1: set up to get my own bedroom for the first

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Speaker 1: time in my life for my younger brother decided he

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Speaker 1: wanted to move into the bedroom because he was scared

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Speaker 1: to sleep alone. So I think I'm trying to think

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Speaker 1: probably when I was in college, his first time I

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Speaker 1: ever had a bedroom to myself. So yes, it was gad.

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Speaker 3: What did your father do to support eight children? Might

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Speaker 3: see him private equity or something.

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Speaker 1: He was He was a research chemist for DuPont and

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Speaker 1: so he spent his whole life on plastics. So the graduate,

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Speaker 1: you know, plastics, young man, my dad was at you.

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Speaker 3: Know, he's so that's what he grew up in Ohio

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Speaker 3: And then you went to college in the East Coast

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Speaker 3: and at Brown. Yes, and you were the co captain

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Speaker 3: of the rugby team.

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Speaker 1: Yes.

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Speaker 3: And do you still play rugby or not so much?

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Speaker 1: No, I don't play. I played rugby at Brown, I

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Speaker 1: played rugby at law school, and I played rugby after.

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Speaker 1: It's a great sport. Have never played it till I

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Speaker 1: played it at college. It is, in a way the

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Speaker 1: most intense. It looks like disorganization out there is extreme

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Speaker 1: ill organized. But it's unique and that it's physical and tackling.

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Speaker 1: You kick, you run. Everybody gets to handle the ball

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Speaker 1: and you run for eighty minutes. And so it's a

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Speaker 1: very demanding game. It was a lot of fun. Okay.

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Speaker 3: So now you are the chancellor of Brown University, which

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Speaker 3: means the chairman of the board essentially. So how do

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Speaker 3: you have time for that?

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Speaker 1: I've been on the board for fifteen years and at

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Speaker 1: the end of the day, the chair of a board,

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Speaker 1: Chris Packson runs university. Doesn't spectacular job. And our job

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Speaker 1: is to govern and not you know.

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Speaker 3: So after you graduated from Brown, you went to law

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Speaker 3: school Notre Dame. Yes, sir, and okay. And did you

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Speaker 3: play rugby at Notre Dames? I did, okay. So then

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Speaker 3: you went to practice law back in Rhode Island? Is

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Speaker 3: that right? Why did you move back to Rhode Island?

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Speaker 3: You're from Ohio, you went to Notre Dame and the Midwest.

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Speaker 3: Why did you go back to Rhode Island.

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Speaker 1: Well, none of the Boston law firms would hire a

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Speaker 1: person from not Dame law school, so I.

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Speaker 3: Had, you know, okay, it was, it was.

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Speaker 1: It's hard to believe, but literally I was the first

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Speaker 1: lawyer hired by the firm and I'm from Notre Dame.

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Speaker 1: And they did it more because I had the Brown

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Speaker 1: you know connection stuff. But the big law firms in Boston,

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Speaker 1: you know, just even with one of my teammates working there,

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Speaker 1: founding John Theclair, they couldn't convince them to hire me.

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Speaker 1: So I ended up with a great law firm and

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Speaker 1: had a great short legal career there, and it didn't.

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Speaker 3: So I'm a big fan of people who are lawyers

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Speaker 3: getting out of law and going into finance. So I

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Speaker 3: can empathize with you. Okay, so you're practicing lawyer, minding

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Speaker 3: your own business. I assume you're a good lawyer. What

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Speaker 3: kind of were your corporate lawyer.

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Speaker 1: We had this instant when I came out. I've lost

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Speaker 1: When I went to law school, I was going to

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Speaker 1: be a criminal lawyer, because it was afinutely Bailey, it

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Speaker 1: was the rock of the world at that point. And

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Speaker 1: or I was going to be a labor lawyer. And

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Speaker 1: then I went to law school, and I went to

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Speaker 1: a firm, and oddly enough, you know, I went to

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Speaker 1: law school. From eighty one to eighty four, there were

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Speaker 1: no corporate lawyers in America because it was before the

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Speaker 1: eighties took off, and after the seventies the activity died.

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Speaker 1: So I, being a person that is impatient life, I said,

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Speaker 1: when I'd be a corporate lawyer, to much the scrint

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Speaker 1: of the litigation lawyers and stuff. Who thought that I

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Speaker 1: lost my bard? But so I became a corporate lawyer

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Speaker 1: more by I could see the opportunity to get responsibility.

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Speaker 1: And I did that for nine years and Praham a partner.

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Speaker 3: And now how did you escape from being a corporate lawyer?

403
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Speaker 3: What did you do?

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Speaker 1: There's a fellow named one of my mentors is named

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Speaker 1: Terry Murray, who ran Fleet and I did corporate law.

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Speaker 1: A lot of work I did for Fleet and then

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Speaker 1: Terry after we did a transaction called the Bank Canoeing

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Speaker 1: and transaction with KKR put money into the bank industry,

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Speaker 1: and we bought the Bank Aneing, And I mean you,

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Speaker 1: Fleet bought the bankneeing And from the federal government in

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Speaker 1: the early nineties after the real estate crisis. I'd structured

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Speaker 1: that deal in a way that I'd structured private equity

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Speaker 1: deals for our bank private equity firm, which was a

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Speaker 1: thing called dual convertible preferred stock converted into a parent

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Speaker 1: company stock or bank stock, never been done in the

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Speaker 1: public array. Terry said to the General Council, he's too

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Speaker 1: smart to be a lawyer, which I never figured out

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Speaker 1: what the General Council thought about. He was a brilliant guy,

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Speaker 1: and he said, get him in here and we'll figure

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Speaker 1: out if he's gonna do something.

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Speaker 3: So he and I went to work at Fleet, which

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Speaker 3: is headquartered in Rhode Island.

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Speaker 1: I just went to work for Fleet, and I was

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Speaker 1: deputy general counsel for like three months and then went

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Speaker 1: on a special project to re engineer the company, and

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Speaker 1: I came.

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Speaker 3: In and Fleet ultimately merged with Bank Boston. And how

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Speaker 3: did you survive?

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Speaker 1: That. Well, that was the last deal I did is

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Speaker 1: I was a head of M and A and strategy

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Speaker 1: and Terry Murray and Chad gift or put thing of

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Speaker 1: that deal. And Chad took a liking to me.

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Speaker 3: I was acquired give who was ahead of Bank Boss.

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Speaker 1: It was acquired taste for Chad because I was in

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Speaker 1: the middle of negotiating getting all the cost structure and

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Speaker 1: getting the alignment, and I was meant to be the

437
00:21:07,760 --> 00:21:10,920
Speaker 1: pain in the butt. And so Chad ultimately took a

438
00:21:10,960 --> 00:21:12,879
Speaker 1: liking to me as a great mentor and said you

439
00:21:12,960 --> 00:21:14,760
Speaker 1: got to run a business, and put me in running

440
00:21:14,760 --> 00:21:17,639
Speaker 1: a business. And we were merging two companies together. And

441
00:21:18,160 --> 00:21:21,560
Speaker 1: I survived and ran the wealth management business.

442
00:21:21,280 --> 00:21:23,040
Speaker 3: For if he ran the wealth management business for the

443
00:21:23,040 --> 00:21:28,160
Speaker 3: combined Bank Boston Fleet and then Bank Boston Fleet combined

444
00:21:28,200 --> 00:21:30,879
Speaker 3: company was sold to Bank of America.

445
00:21:30,440 --> 00:21:31,720
Speaker 1: In two thousand and three fall.

446
00:21:31,840 --> 00:21:33,840
Speaker 3: Yeah, and so how did you survive that one?

447
00:21:34,280 --> 00:21:37,200
Speaker 1: Well, they asked me to run the wealth management business

448
00:21:37,240 --> 00:21:40,080
Speaker 1: and the combined companies, and I did that, and Ken

449
00:21:40,119 --> 00:21:43,359
Speaker 1: Lewis wanted to integrate some of the people because the

450
00:21:43,480 --> 00:21:47,640
Speaker 1: companies were maybe at sixty forty, but they're very sizeable companies,

451
00:21:47,640 --> 00:21:49,680
Speaker 1: and so he was trying to get a manager team

452
00:21:49,680 --> 00:21:52,680
Speaker 1: that represented both companies, and so Chad was chair and

453
00:21:52,760 --> 00:21:55,560
Speaker 1: Ken for CEO, and I went and ran in the

454
00:21:55,560 --> 00:21:57,080
Speaker 1: wealth management business of the combined company.

455
00:21:57,160 --> 00:21:59,560
Speaker 3: Right, But then you became the general counsel.

456
00:21:59,640 --> 00:22:00,840
Speaker 1: For four days for.

457
00:22:02,320 --> 00:22:02,720
Speaker 3: How long?

458
00:22:02,840 --> 00:22:04,320
Speaker 1: Forty days and forty nights.

459
00:22:04,160 --> 00:22:07,320
Speaker 3: All right, So we became the general counsel of the

460
00:22:07,320 --> 00:22:08,600
Speaker 3: combined Bank of America.

461
00:22:08,440 --> 00:22:12,320
Speaker 1: Ye. And then well then, so what happened was in

462
00:22:12,359 --> 00:22:17,120
Speaker 1: December of two thousand and eight. We remember we bought

463
00:22:17,119 --> 00:22:18,919
Speaker 1: Merril and the Lehman the weekend and everything, so we

464
00:22:18,920 --> 00:22:21,600
Speaker 1: were originally trying to buy it Leman. We said we

465
00:22:21,600 --> 00:22:24,160
Speaker 1: couldn't do it as a company I was running at

466
00:22:24,160 --> 00:22:27,119
Speaker 1: that point the corporate Investment Bank and other parts of

467
00:22:27,520 --> 00:22:30,680
Speaker 1: Bank of America. We couldn't do that. And then over

468
00:22:30,680 --> 00:22:34,680
Speaker 1: the weekend that's when the world became very ugly, and

469
00:22:34,760 --> 00:22:37,480
Speaker 1: so we bought Meryl, and remember Morgan stand they got

470
00:22:37,480 --> 00:22:41,840
Speaker 1: investment from the Japanese bank and investments were made around

471
00:22:41,920 --> 00:22:46,720
Speaker 1: and so after that, I'm sort of running the integration

472
00:22:46,840 --> 00:22:50,480
Speaker 1: a bunch of stuff as we're going through from October

473
00:22:50,640 --> 00:22:53,680
Speaker 1: or whatever it was till the fall and then uh,

474
00:22:53,840 --> 00:22:57,600
Speaker 1: around the time Merrill showed up without with a seven

475
00:22:57,640 --> 00:23:01,040
Speaker 1: billion dollar loss in the quarter at Les Captain's supposed

476
00:23:01,040 --> 00:23:03,720
Speaker 1: to have. We started telling the government we couldn't do

477
00:23:03,800 --> 00:23:05,919
Speaker 1: the deal and stuff, and so Ken asked me to

478
00:23:05,920 --> 00:23:08,239
Speaker 1: be a general counsel because we were limiting a lot

479
00:23:08,280 --> 00:23:10,679
Speaker 1: of jobs. And I actually eliminated my job and I

480
00:23:10,800 --> 00:23:12,800
Speaker 1: was basically out of the company. Said you know what,

481
00:23:12,920 --> 00:23:15,760
Speaker 1: stay and become general counsel because we need somebody. And

482
00:23:15,800 --> 00:23:17,040
Speaker 1: from December ninth to.

483
00:23:17,119 --> 00:23:20,160
Speaker 3: All right, became the general counsel the Combined Bank of America.

484
00:23:19,920 --> 00:23:21,920
Speaker 1: As we as we negotiate with the government to figure

485
00:23:21,960 --> 00:23:23,600
Speaker 1: out how to get the Meryl deal done. And then

486
00:23:23,640 --> 00:23:25,639
Speaker 1: I went back in business right after. But then you

487
00:23:25,720 --> 00:23:29,600
Speaker 1: left after that for a while, no, no, I became.

488
00:23:30,840 --> 00:23:35,160
Speaker 1: So then in early mid January of nine I took

489
00:23:35,160 --> 00:23:37,200
Speaker 1: over a bunch of the businesses after John Thane left

490
00:23:37,240 --> 00:23:38,919
Speaker 1: and went back into business. And then by the end

491
00:23:38,960 --> 00:23:40,960
Speaker 1: of a nine MCU it had a lot of jobs

492
00:23:40,960 --> 00:23:43,280
Speaker 1: in a short period of time. So now it wasn't

493
00:23:43,320 --> 00:23:44,000
Speaker 1: what somebody should know.

494
00:23:44,000 --> 00:23:46,760
Speaker 3: Now, you bought Merrill Lynch at a discount, I guess

495
00:23:46,760 --> 00:23:48,560
Speaker 3: the low price, but it turned out to be a

496
00:23:48,600 --> 00:23:49,160
Speaker 3: pretty good deal.

497
00:23:49,200 --> 00:23:51,320
Speaker 1: I guess from an operating base, it was always a

498
00:23:51,320 --> 00:23:56,200
Speaker 1: good deal. The issue. The issue was that the hole

499
00:23:56,240 --> 00:24:00,600
Speaker 1: in their capital cost us something delution. So we worked

500
00:24:00,640 --> 00:24:04,639
Speaker 1: through that over time. So you know, with new capital

501
00:24:04,680 --> 00:24:07,480
Speaker 1: rules and everything, we had about seven a half eight

502
00:24:07,480 --> 00:24:08,960
Speaker 1: billion shares at the time. It went up to almost

503
00:24:09,000 --> 00:24:11,920
Speaker 1: twelve billion. Now we're down about seven point four, so

504
00:24:12,320 --> 00:24:13,679
Speaker 1: back down to where we should have been. But it

505
00:24:13,680 --> 00:24:15,920
Speaker 1: took a lot of work twelve But from an operating base,

506
00:24:15,960 --> 00:24:16,560
Speaker 1: it was always on home.

507
00:24:16,680 --> 00:24:20,840
Speaker 3: Right before your bank came back, and from a rough

508
00:24:20,880 --> 00:24:25,400
Speaker 3: position you borrowed in effect five billion dollars from Warren Buffett?

509
00:24:25,720 --> 00:24:28,359
Speaker 3: Is that right? More or less? And it was pretty

510
00:24:28,359 --> 00:24:33,160
Speaker 3: expensive capital. Some people say so did Warren Buffett got

511
00:24:33,160 --> 00:24:35,080
Speaker 3: a better deal? The Bank of America had a better

512
00:24:35,119 --> 00:24:35,840
Speaker 3: deal out of that.

513
00:24:36,160 --> 00:24:39,720
Speaker 1: Well, if you our stock was trading at five dollars,

514
00:24:40,600 --> 00:24:43,560
Speaker 1: he converted seven to fourteen a share, so it was

515
00:24:43,600 --> 00:24:45,720
Speaker 1: a class of twenty percent. He had a six percent dividend.

516
00:24:45,760 --> 00:24:47,600
Speaker 1: We were paying low dividend. But if you bought the

517
00:24:47,640 --> 00:24:50,040
Speaker 1: comment or the preferred deferred had a ten percent dividend

518
00:24:50,000 --> 00:24:52,320
Speaker 1: in that day in the common, you would have done

519
00:24:52,359 --> 00:24:54,440
Speaker 1: better because you would have picked up more the first

520
00:24:54,440 --> 00:24:54,840
Speaker 1: two bucks.

521
00:24:55,560 --> 00:24:57,800
Speaker 3: Did you negotiate the deal with Warren Buffett? Or is

522
00:24:57,840 --> 00:24:58,639
Speaker 3: he called smart?

523
00:25:00,760 --> 00:25:02,879
Speaker 1: It's Apocryphay, he's told the story, so it's not my

524
00:25:03,200 --> 00:25:07,800
Speaker 1: but he The idea came to in the bath. He

525
00:25:07,880 --> 00:25:10,159
Speaker 1: called up, got into the call center believe or not,

526
00:25:12,359 --> 00:25:14,600
Speaker 1: then finally got someone to get a number, called me

527
00:25:14,640 --> 00:25:16,320
Speaker 1: and said, I want to put five billionaire bank and

528
00:25:16,359 --> 00:25:18,359
Speaker 1: I said, we don't need the capitol. Warren, he said, oh,

529
00:25:18,359 --> 00:25:20,440
Speaker 1: no you don't. That's why I'm calling you. You need

530
00:25:20,520 --> 00:25:23,640
Speaker 1: stability and I can provide stability. And I said, yes

531
00:25:23,680 --> 00:25:26,800
Speaker 1: you can. The night before a found named Mike Longs

532
00:25:26,800 --> 00:25:28,639
Speaker 1: and now runs viser who has work for us at

533
00:25:28,640 --> 00:25:31,000
Speaker 1: the time, and found name Bruce Thomps. And I were

534
00:25:31,000 --> 00:25:32,880
Speaker 1: sitting here saying we need to we need to get

535
00:25:32,920 --> 00:25:36,159
Speaker 1: some stability because remember what people think about if government

536
00:25:36,160 --> 00:25:38,639
Speaker 1: shutdowns in defaults. The government was really in trouble in

537
00:25:38,680 --> 00:25:41,960
Speaker 1: August of twenty eleven. They couldn't come together and funding.

538
00:25:42,080 --> 00:25:45,639
Speaker 1: They were starting to overdraft their accounts, let's just call

539
00:25:45,680 --> 00:25:48,320
Speaker 1: it that. So that was going on, and then we

540
00:25:48,320 --> 00:25:50,600
Speaker 1: were getting background because all the mortgage litigation, and so

541
00:25:50,720 --> 00:25:52,560
Speaker 1: he came in put the money in and from then,

542
00:25:52,760 --> 00:25:54,960
Speaker 1: you know, from basically five dollars share price up to

543
00:25:55,160 --> 00:25:57,960
Speaker 1: forty four, forty five dollars whatever. It's been pretty unbroken since.

544
00:25:58,160 --> 00:25:59,560
Speaker 1: So he's faredwell, we fared well.

545
00:25:59,720 --> 00:26:01,960
Speaker 3: She's don't have the stock erse he sold mostly.

546
00:26:02,200 --> 00:26:05,000
Speaker 1: Sold, He sold about a third of it and then yeah,

547
00:26:05,560 --> 00:26:07,840
Speaker 1: actually he bought another three hundred million shares. He ended

548
00:26:07,880 --> 00:26:09,280
Speaker 1: up with a billion shares. He sold down at like

549
00:26:09,320 --> 00:26:12,199
Speaker 1: six hundred last I know. But he's he did very

550
00:26:12,200 --> 00:26:13,680
Speaker 1: well and we did very well, and he's been a

551
00:26:13,720 --> 00:26:14,240
Speaker 1: great investor.

552
00:26:14,320 --> 00:26:16,800
Speaker 3: Let's talk about the beginning of Bank of America. So

553
00:26:16,920 --> 00:26:20,440
Speaker 3: Bank of America started as a Bank of Italy. So

554
00:26:20,720 --> 00:26:22,720
Speaker 3: who started Bank of America And why did you name

555
00:26:22,760 --> 00:26:24,800
Speaker 3: it after Italy as opposed to America.

556
00:26:24,960 --> 00:26:28,480
Speaker 1: Well, apg And who was Italian descent, started the Bank

557
00:26:28,520 --> 00:26:29,959
Speaker 1: of Italy when he came to the country in San

558
00:26:29,960 --> 00:26:33,600
Speaker 1: Francisco to help the local the Italian community that emigrated

559
00:26:34,200 --> 00:26:38,000
Speaker 1: to San Francisco. And so and he became famous in

560
00:26:38,040 --> 00:26:41,280
Speaker 1: the San Francisco earthquakes and fires in the early nineteen

561
00:26:41,320 --> 00:26:44,240
Speaker 1: hundreds by setting up a barrel and starting one money.

562
00:26:44,359 --> 00:26:50,680
Speaker 1: And then fast forward to nineteen ninety nine when the

563
00:26:50,880 --> 00:26:53,600
Speaker 1: Nation's Bank, which was the North Carolina Bank, which is

564
00:26:53,640 --> 00:26:59,040
Speaker 1: the bank the bank today and the Bank of America

565
00:26:59,119 --> 00:27:02,480
Speaker 1: merged good names. Nation Bank wasn't a bad bank that name,

566
00:27:02,520 --> 00:27:04,359
Speaker 1: and but Bank of America is a better name, so

567
00:27:04,400 --> 00:27:07,040
Speaker 1: they took the name. But the operating company has survived

568
00:27:07,040 --> 00:27:07,400
Speaker 1: as bank.

569
00:27:07,480 --> 00:27:10,399
Speaker 3: It was Nation's Bank moved from San Francisco headquarters to

570
00:27:10,680 --> 00:27:12,880
Speaker 3: Charlotte headquarters where you are headquartered now.

571
00:27:13,320 --> 00:27:15,919
Speaker 1: And and you know, it's interesting because with the la fires,

572
00:27:15,960 --> 00:27:18,720
Speaker 1: we've We've asked our teammate Raoul and I to step

573
00:27:18,760 --> 00:27:21,280
Speaker 1: in because you know, we have a herriage in California

574
00:27:21,280 --> 00:27:23,440
Speaker 1: helping in times of stress that we have a big

575
00:27:23,480 --> 00:27:25,880
Speaker 1: business in California, and Raoul was doing a great job.

576
00:27:25,920 --> 00:27:30,080
Speaker 1: But you do have these historical ways that we've done

577
00:27:30,080 --> 00:27:31,719
Speaker 1: business around the We were the first bank to make

578
00:27:31,760 --> 00:27:33,800
Speaker 1: a loan in Japan after over two ended at the

579
00:27:33,800 --> 00:27:36,560
Speaker 1: request of the US government to start lending money. We've

580
00:27:36,560 --> 00:27:39,000
Speaker 1: been in the UAE since it was formed. So you

581
00:27:39,080 --> 00:27:41,080
Speaker 1: go back and heritage, it's just a wonderful herriage. And

582
00:27:41,119 --> 00:27:43,560
Speaker 1: the Bank of Italy herriage is apocryphal because of been

583
00:27:43,640 --> 00:27:46,199
Speaker 1: any but the reality is the bank that is the

584
00:27:46,240 --> 00:27:49,119
Speaker 1: bank that survived on us and drove all This was

585
00:27:49,200 --> 00:27:52,639
Speaker 1: the North Carolina Bank, which formed and bring capital to

586
00:27:52,680 --> 00:27:55,120
Speaker 1: the Southeast as a group because the New York bankers

587
00:27:55,520 --> 00:27:58,040
Speaker 1: wouldn't come down to as much business. That is the

588
00:27:58,080 --> 00:28:00,160
Speaker 1: bank that survived all this, and it's it's so all

589
00:28:00,160 --> 00:28:02,240
Speaker 1: these rivers came together and formed this Hunage River.

590
00:28:02,520 --> 00:28:04,760
Speaker 3: One of your predecessors is the head of Bank of America,

591
00:28:04,840 --> 00:28:07,080
Speaker 3: became the head of the World Bank at one point.

592
00:28:07,800 --> 00:28:09,280
Speaker 3: You have any interest in being the head of the

593
00:28:09,320 --> 00:28:11,560
Speaker 3: World Bank, You've.

594
00:28:11,359 --> 00:28:13,879
Speaker 1: Got a j coming in. I'll let him. Let him

595
00:28:13,920 --> 00:28:16,320
Speaker 1: win that because okay, I haven't been asked, and he

596
00:28:16,600 --> 00:28:18,000
Speaker 1: does a great he'll be terrific for it.

597
00:28:18,440 --> 00:28:20,320
Speaker 3: So let's says, I'm going to ask you about this

598
00:28:21,400 --> 00:28:26,520
Speaker 3: banking today. Why do we need all these bank facilities,

599
00:28:26,600 --> 00:28:30,440
Speaker 3: bank branches, buildings, financial centers because everything is done online.

600
00:28:30,480 --> 00:28:32,760
Speaker 3: It seems that do you actually have a lot of buildings.

601
00:28:32,760 --> 00:28:34,480
Speaker 3: You really need all those buildings you have where you

602
00:28:34,520 --> 00:28:35,000
Speaker 3: have your bank.

603
00:28:35,600 --> 00:28:39,200
Speaker 1: This is the classic do as I do, not as

604
00:28:39,280 --> 00:28:43,400
Speaker 1: I say. Because in the day between this morning when

605
00:28:43,400 --> 00:28:47,600
Speaker 1: the banks open up to tomorrow morning, four hundred thousand

606
00:28:47,600 --> 00:28:50,200
Speaker 1: people come into our branches. So this idea nobody goes

607
00:28:50,200 --> 00:28:53,120
Speaker 1: to bank branch. Just is not true. The idea nobody

608
00:28:53,200 --> 00:28:56,040
Speaker 1: uses cash. Well, about a quarter billion dollars and we'll

609
00:28:56,040 --> 00:28:57,680
Speaker 1: go out of our ATM machines in the next twenty

610
00:28:57,680 --> 00:29:01,080
Speaker 1: four hours the idea, but nobody writes checks. There were

611
00:29:01,120 --> 00:29:02,440
Speaker 1: one millions.

612
00:29:02,560 --> 00:29:04,280
Speaker 3: How many How many banks do you have around the

613
00:29:04,320 --> 00:29:04,920
Speaker 3: country an hour?

614
00:29:05,040 --> 00:29:07,320
Speaker 1: We have three thousand, seven hundred. We went from six

615
00:29:07,360 --> 00:29:09,320
Speaker 1: thousand down to three seven.

616
00:29:08,960 --> 00:29:10,840
Speaker 3: And what about eight pms? You have a lot of them.

617
00:29:11,040 --> 00:29:12,760
Speaker 1: We have about fourteen thousand of them. To the high

618
00:29:12,760 --> 00:29:15,840
Speaker 1: point you had eighteen thousand. And that's technology, end of

619
00:29:15,840 --> 00:29:20,040
Speaker 1: the day. The huge technology impact in banking over a

620
00:29:20,040 --> 00:29:22,480
Speaker 1: long period of time. But since the team started in

621
00:29:22,520 --> 00:29:25,240
Speaker 1: twenty ten, coming together really started a few years before that,

622
00:29:25,640 --> 00:29:32,800
Speaker 1: we have been basically engineering head count, the facilities. We

623
00:29:32,800 --> 00:29:34,520
Speaker 1: had one hundred and twenty million square feet of real

624
00:29:34,600 --> 00:29:36,120
Speaker 1: estate in two thousand and ten. We have about seventy

625
00:29:36,120 --> 00:29:37,080
Speaker 1: million to day.

626
00:29:37,400 --> 00:29:40,120
Speaker 3: Now, have you ever gone to get money out of

627
00:29:40,160 --> 00:29:41,600
Speaker 3: an ATM and been denied?

628
00:29:44,400 --> 00:29:49,160
Speaker 1: Not since college. During the Great Blizzards eight Blizzards of

629
00:29:49,200 --> 00:29:50,920
Speaker 1: seventy eight, when we were at the wrong we had

630
00:29:50,920 --> 00:29:52,600
Speaker 1: a friend gave us an ATM card to go out

631
00:29:52,640 --> 00:29:54,960
Speaker 1: and get some money to buy liquor before everything shut

632
00:29:55,000 --> 00:29:57,000
Speaker 1: down and we went to the wrong bank.

633
00:29:57,200 --> 00:29:59,600
Speaker 3: What about give us some money About credit cards? You

634
00:29:59,600 --> 00:30:00,840
Speaker 3: ever had our credit card denied?

635
00:30:01,840 --> 00:30:06,400
Speaker 1: Not that I'm aware of, but so hopefully nobody else has.

636
00:30:06,440 --> 00:30:07,400
Speaker 1: It shouldn't have been either.

637
00:30:07,600 --> 00:30:11,960
Speaker 3: How has the world of technology affected the banking world?

638
00:30:12,120 --> 00:30:16,880
Speaker 3: So right now so called fintech? Has fintech dramatically changed

639
00:30:16,920 --> 00:30:18,960
Speaker 3: the way Bank of America operates.

640
00:30:18,760 --> 00:30:22,200
Speaker 1: It's so we invest about four billion dollars in new

641
00:30:22,240 --> 00:30:25,240
Speaker 1: code every year. Every weekend, we'll have a couple million

642
00:30:25,280 --> 00:30:27,920
Speaker 1: lines of code go in to amend our systems and

643
00:30:28,000 --> 00:30:31,720
Speaker 1: change our systems or add new technology that's not to

644
00:30:31,800 --> 00:30:33,520
Speaker 1: run the systems. That's an their eight or nine billion

645
00:30:33,520 --> 00:30:37,800
Speaker 1: dollars that is just new activity. So the impacts have

646
00:30:37,800 --> 00:30:41,880
Speaker 1: been unbelievable, But people over it's still human beings and

647
00:30:41,920 --> 00:30:43,239
Speaker 1: what they do and how they do it. So you

648
00:30:43,280 --> 00:30:45,560
Speaker 1: have to be high touch in high tech. So in

649
00:30:45,600 --> 00:30:48,320
Speaker 1: the mid nineties when I was ahead of strategy, it's

650
00:30:48,320 --> 00:30:51,120
Speaker 1: the company I remember, you know, consultants coming in saying

651
00:30:51,120 --> 00:30:53,160
Speaker 1: twenty years will be no bank branches. Well it's thirty

652
00:30:53,240 --> 00:30:55,320
Speaker 1: years and guess what we still have thirty seven hundred.

653
00:30:56,000 --> 00:30:58,160
Speaker 1: The reality is people want it all the ways. So

654
00:30:58,440 --> 00:31:03,040
Speaker 1: but the impact of the phone iPhone in particular was

655
00:31:03,120 --> 00:31:07,120
Speaker 1: so different, and we were the first app available on

656
00:31:07,160 --> 00:31:10,200
Speaker 1: the iPhone. And the reason why is we'd built our

657
00:31:10,240 --> 00:31:13,920
Speaker 1: technology through someone's pressions and the compressions in the company

658
00:31:14,320 --> 00:31:16,840
Speaker 1: to be a web based technology. Back when people didn't

659
00:31:16,840 --> 00:31:18,880
Speaker 1: do that. It was really an app based technology. So

660
00:31:19,240 --> 00:31:21,480
Speaker 1: it could be app made an app back we don't

661
00:31:21,480 --> 00:31:22,840
Speaker 1: think of these things they but back then that was

662
00:31:22,880 --> 00:31:24,720
Speaker 1: an unusual thing to have an app. Everybody went to

663
00:31:25,520 --> 00:31:28,560
Speaker 1: the websites, et cetera. So that took off. And so

664
00:31:28,680 --> 00:31:31,840
Speaker 1: from that start, you know, you now have forty million

665
00:31:32,000 --> 00:31:35,160
Speaker 1: consumers who bank digitally with us all the time. Last

666
00:31:35,240 --> 00:31:41,640
Speaker 1: year we had about ninety plus percent of our interactions

667
00:31:41,680 --> 00:31:46,040
Speaker 1: with consumers are digital. And yet the critically importance of

668
00:31:46,080 --> 00:31:49,160
Speaker 1: a person going into one of our stores and saying,

669
00:31:49,440 --> 00:31:51,120
Speaker 1: I got to figure out how to save more money.

670
00:31:51,120 --> 00:31:53,680
Speaker 1: Can you help me do a financial plan. My mother's sick,

671
00:31:53,760 --> 00:31:55,680
Speaker 1: I've got a power of attorney. I need you to

672
00:31:55,680 --> 00:31:58,320
Speaker 1: figure out how I can manage our affairs. My kid

673
00:31:58,360 --> 00:32:00,320
Speaker 1: wants to go to college. I need to figure out

674
00:32:00,320 --> 00:32:04,640
Speaker 1: how to borrow the money. All those things are critically important,

675
00:32:04,680 --> 00:32:05,760
Speaker 1: so you have to be able to do both.

676
00:32:05,960 --> 00:32:09,480
Speaker 3: So people still writing checks the way they did ten

677
00:32:09,560 --> 00:32:11,720
Speaker 3: twenty thirty years ago. You set a big business for

678
00:32:11,760 --> 00:32:12,640
Speaker 3: your check cashing.

679
00:32:13,360 --> 00:32:15,720
Speaker 1: Check cashing is not a business, it's a convenience for

680
00:32:15,760 --> 00:32:20,800
Speaker 1: the customer. The check's written from like twenty nineteen and

681
00:32:20,840 --> 00:32:23,240
Speaker 1: now probably down thirty or forty percent, there's still a

682
00:32:23,280 --> 00:32:25,840
Speaker 1: fair amount of them. What you've seen is a dollar

683
00:32:25,920 --> 00:32:28,920
Speaker 1: volume written staates flat right, but the number written comes down,

684
00:32:29,960 --> 00:32:31,920
Speaker 1: and we track that literally every week. But we track

685
00:32:31,960 --> 00:32:33,880
Speaker 1: all our spending every week. But we can see what's

686
00:32:33,920 --> 00:32:36,680
Speaker 1: going on in the Americans consumer. But in the dynamic

687
00:32:36,680 --> 00:32:38,400
Speaker 1: there is people are still paying their rent or the

688
00:32:38,480 --> 00:32:41,280
Speaker 1: mortgage or something like that car payment with it. What

689
00:32:42,080 --> 00:32:45,640
Speaker 1: they've done with Zell, which didn't exist a decade ago

690
00:32:45,720 --> 00:32:49,640
Speaker 1: and now is the dominant course. Our clients send more

691
00:32:49,680 --> 00:32:53,080
Speaker 1: money over zel than total VEMO is sent to give

692
00:32:53,080 --> 00:32:55,360
Speaker 1: you a cent said so in so it's become the

693
00:32:55,360 --> 00:32:58,120
Speaker 1: dominant way. That's replaced a lot of small dollar checks.

694
00:32:58,240 --> 00:32:59,960
Speaker 1: But the big dollar checks still go through the system.

695
00:33:00,040 --> 00:33:02,000
Speaker 3: Old days, and I used to write a check, bank

696
00:33:02,080 --> 00:33:05,000
Speaker 3: eventually would send me back the canceled check. What happened

697
00:33:05,000 --> 00:33:07,000
Speaker 3: to those canceled checks? Where do you keep them all? Now,

698
00:33:07,200 --> 00:33:07,760
Speaker 3: they're all.

699
00:33:09,160 --> 00:33:12,920
Speaker 1: Document destruction policies, but they're all image based. So even

700
00:33:12,960 --> 00:33:15,160
Speaker 1: if you went to a branch and deposit check, it's

701
00:33:15,200 --> 00:33:20,000
Speaker 1: image based, right then the actual checks destroyed. It's the

702
00:33:20,080 --> 00:33:24,080
Speaker 1: idea of taking a check deposit ATM. So about fifteen

703
00:33:24,080 --> 00:33:27,800
Speaker 1: percent of the banks deposits checks are deposited at the

704
00:33:27,800 --> 00:33:31,880
Speaker 1: physical of ATM a lot of small business activity. The

705
00:33:31,960 --> 00:33:36,200
Speaker 1: other yep, that's called eighty five percent. About fifty percent

706
00:33:36,240 --> 00:33:38,800
Speaker 1: of it goes through mobile taking a picture of it,

707
00:33:38,840 --> 00:33:42,360
Speaker 1: which is you imaging the check. The other thirty percent

708
00:33:42,840 --> 00:33:45,520
Speaker 1: goes through the ATMs, which the ATM takes a picture

709
00:33:45,520 --> 00:33:47,560
Speaker 1: of check. The check disappears in all cases.

710
00:33:47,680 --> 00:33:49,640
Speaker 3: So if I want to go to use an ATM,

711
00:33:49,840 --> 00:33:52,320
Speaker 3: and I have a Bank of America ATM card, but

712
00:33:52,400 --> 00:33:55,280
Speaker 3: I don't see any Bank of America ATMs, I go

713
00:33:55,360 --> 00:33:58,280
Speaker 3: to some other bank ATM, I pay a fee.

714
00:33:59,000 --> 00:34:01,720
Speaker 1: Is that you would, David, because you're you wouldn't, but

715
00:34:01,840 --> 00:34:02,520
Speaker 1: other people might.

716
00:34:03,720 --> 00:34:05,200
Speaker 3: I thought you have to pay a fee, right be?

717
00:34:05,560 --> 00:34:07,720
Speaker 3: I mean is that a profit center for banks? Those

718
00:34:07,720 --> 00:34:08,200
Speaker 3: fees are?

719
00:34:09,239 --> 00:34:11,440
Speaker 1: You know, at the end of the day, we get

720
00:34:11,480 --> 00:34:15,040
Speaker 1: fifty five percent of our revenue, our one hundred million

721
00:34:15,080 --> 00:34:17,600
Speaker 1: dollars of revenue last year, fifty five percent came from interest,

722
00:34:17,880 --> 00:34:21,160
Speaker 1: forty five percent fees. The dominant part of those fees

723
00:34:21,200 --> 00:34:25,920
Speaker 1: are trading revenue and asset management fees and things like that.

724
00:34:26,160 --> 00:34:29,280
Speaker 1: We have consumer fees, but they've come down dramatically because

725
00:34:29,320 --> 00:34:32,480
Speaker 1: basically you said that the consumer is you keep changing

726
00:34:32,480 --> 00:34:34,600
Speaker 1: your behavior. We keep driving on the cost to serve,

727
00:34:34,719 --> 00:34:36,800
Speaker 1: and we'll give that back by low and lower fee structure.

728
00:34:36,880 --> 00:34:39,920
Speaker 1: So we have a no feed checking account. We have

729
00:34:40,680 --> 00:34:43,200
Speaker 1: a five dollars simple checking account that people know that

730
00:34:43,200 --> 00:34:47,319
Speaker 1: you can't overdraft. We've we do our overdraft fees. When

731
00:34:47,360 --> 00:34:49,719
Speaker 1: we first start changing the policies fifteen years ago, where

732
00:34:50,200 --> 00:34:52,040
Speaker 1: you have five billion dollars a year and now there

733
00:34:52,040 --> 00:34:53,680
Speaker 1: are one hundred and twenty million dollars a year, do you.

734
00:34:53,719 --> 00:34:59,000
Speaker 3: Think we will have in our collective lifetime no more currency,

735
00:34:59,120 --> 00:35:01,399
Speaker 3: everything will be digital or you think that's not likely?

736
00:35:02,680 --> 00:35:06,719
Speaker 1: If not in our lifetime, what.

737
00:35:06,640 --> 00:35:09,680
Speaker 3: About a digital currency which doesn't preclude other things, but

738
00:35:09,880 --> 00:35:11,600
Speaker 3: a digital currency, Well, I think the.

739
00:35:11,560 --> 00:35:16,640
Speaker 1: New administration wants to push. So you have to think

740
00:35:16,680 --> 00:35:19,520
Speaker 1: about three parts of this dialog there's a blockchain question,

741
00:35:20,000 --> 00:35:23,080
Speaker 1: there's the stable coin type of currency question, and then

742
00:35:23,080 --> 00:35:28,640
Speaker 1: there's the bitcoin and other types of things. It's pretty

743
00:35:28,640 --> 00:35:30,560
Speaker 1: clear there's going to be a stable coin, which is

744
00:35:30,600 --> 00:35:33,439
Speaker 1: going to be a full dollar backed type of thing,

745
00:35:33,760 --> 00:35:35,480
Speaker 1: which is no different than a money market fund, a

746
00:35:35,520 --> 00:35:37,719
Speaker 1: check access is no different than a bank account really,

747
00:35:37,760 --> 00:35:41,160
Speaker 1: and so if they if they make that legal, we'll

748
00:35:41,200 --> 00:35:43,920
Speaker 1: go into that business. So you'll have a be a

749
00:35:43,920 --> 00:35:46,799
Speaker 1: Bank of America coin in a bank and a US

750
00:35:46,840 --> 00:35:49,080
Speaker 1: dollar deposit, and we'll be able to move them back

751
00:35:49,160 --> 00:35:51,719
Speaker 1: and forth, because now it hasn't been legal for us

752
00:35:51,760 --> 00:35:54,360
Speaker 1: to do it, but it's just then like another foreign currency.

753
00:35:54,560 --> 00:35:56,200
Speaker 1: The question of what it's useful for is going to

754
00:35:56,239 --> 00:35:56,640
Speaker 1: be interesting.

755
00:35:56,719 --> 00:35:59,399
Speaker 3: Right. So in the old days, old ten twenty thirty

756
00:35:59,440 --> 00:36:01,279
Speaker 3: years ago, if you had a lot of coins, you

757
00:36:01,360 --> 00:36:04,399
Speaker 3: put them in a jar or your desk. Eventually could

758
00:36:04,440 --> 00:36:06,480
Speaker 3: wrap them up and take them to the bank. Now,

759
00:36:06,520 --> 00:36:08,160
Speaker 3: if you go to the bank, they don't want the coins,

760
00:36:08,160 --> 00:36:11,000
Speaker 3: so that the what do you do with these coins? Now?

761
00:36:13,360 --> 00:36:15,080
Speaker 1: They we're got to get rid of the pennies. So

762
00:36:15,120 --> 00:36:19,040
Speaker 1: maybe uh yeah, today, if you roll over bring them in,

763
00:36:19,120 --> 00:36:20,799
Speaker 1: they'll they'll count them up and stuff. But it's a

764
00:36:20,800 --> 00:36:25,480
Speaker 1: tricky thing because it's just a lot of work for.

765
00:36:25,600 --> 00:36:28,200
Speaker 3: Okay, so now President Trump said, we're not going to

766
00:36:28,239 --> 00:36:29,240
Speaker 3: make the penny anymore.

767
00:36:29,280 --> 00:36:30,120
Speaker 1: We'll take all your coins.

768
00:36:30,160 --> 00:36:33,080
Speaker 3: Don't worry, Okay, the penny, the penny. What about the penny?

769
00:36:33,080 --> 00:36:34,800
Speaker 3: We don't making the penny? Is that a problem?

770
00:36:35,960 --> 00:36:37,879
Speaker 1: You know? I think the economics that they're talking about

771
00:36:37,960 --> 00:36:40,320
Speaker 1: is it costs more to distribute it. Look, yeah, to

772
00:36:40,400 --> 00:36:47,239
Speaker 1: day we when you think about the bills, you know

773
00:36:47,280 --> 00:36:49,839
Speaker 1: the currency and what it's coin or bills, and it's

774
00:36:49,840 --> 00:36:54,040
Speaker 1: mostly bills in terms of value. If it's an interesting thing.

775
00:36:54,080 --> 00:36:56,799
Speaker 1: So ninety percent of all the bills that move around

776
00:36:56,840 --> 00:37:00,760
Speaker 1: the world we move one day, as at the government.

777
00:37:00,840 --> 00:37:05,040
Speaker 1: And yeah, there's nothing bigger than a hundred. So a

778
00:37:05,040 --> 00:37:09,080
Speaker 1: billion dollars of hundreds weighs a few tons. A million

779
00:37:09,080 --> 00:37:11,120
Speaker 1: dollars of one hundreds is a twenty five foot stack.

780
00:37:11,200 --> 00:37:13,360
Speaker 1: So there's a big physical part of this. Now, the

781
00:37:13,400 --> 00:37:16,760
Speaker 1: reality is that's done for reserve currency in central banks.

782
00:37:16,760 --> 00:37:18,879
Speaker 1: That's who holds the rest of the money. All moves

783
00:37:18,920 --> 00:37:21,640
Speaker 1: digitally day. So we move, We'll move three trillion dollars

784
00:37:21,640 --> 00:37:25,520
Speaker 1: today digitally. So the idea in our consumers money movement

785
00:37:25,680 --> 00:37:29,080
Speaker 1: is dominated digitally, whether it's a z L payment, a

786
00:37:29,120 --> 00:37:33,480
Speaker 1: wire an ach you know, at the end of the day,

787
00:37:33,560 --> 00:37:35,480
Speaker 1: that doesn't include credit and debit cards, which would take

788
00:37:35,520 --> 00:37:37,239
Speaker 1: another big part because the end the day, what's what's

789
00:37:37,239 --> 00:37:39,279
Speaker 1: a debit card? Is just an introduction to digital so

790
00:37:39,800 --> 00:37:42,759
Speaker 1: getting rid of pennies and stuff. There's economics supportive, but

791
00:37:42,800 --> 00:37:45,200
Speaker 1: the reality is will always have currency because that represents you.

792
00:37:45,239 --> 00:37:48,719
Speaker 3: Know, what's the most common uh currency? Is it one

793
00:37:48,760 --> 00:37:50,279
Speaker 3: hundred dollars bill or the one dollar bill?

794
00:37:51,000 --> 00:37:53,120
Speaker 1: I don't know that, but I'm sure there's more ones

795
00:37:53,160 --> 00:37:55,640
Speaker 1: than hundreds. But the end the day, all the big

796
00:37:55,800 --> 00:37:57,560
Speaker 1: you know, the real money movement to the central banks

797
00:37:57,560 --> 00:37:59,720
Speaker 1: is all the hundreds. It's paaladed one hundreds. It's it's

798
00:38:00,440 --> 00:38:02,600
Speaker 1: it's a wild scene to watch, you know, pallets go

799
00:38:02,640 --> 00:38:04,160
Speaker 1: through this. We go to the federal Reserve. We pick

800
00:38:04,200 --> 00:38:06,200
Speaker 1: up these pallets of cash and send them around with

801
00:38:06,320 --> 00:38:09,640
Speaker 1: the Central Bank of you know, France to have the reserves.

802
00:38:09,719 --> 00:38:12,000
Speaker 3: Well, when you need cash, do you go to the

803
00:38:12,040 --> 00:38:14,279
Speaker 3: bank and get cash at the end of the week

804
00:38:14,360 --> 00:38:17,359
Speaker 3: or do you just go to ATM or you don't

805
00:38:17,440 --> 00:38:18,279
Speaker 3: use cash so much?

806
00:38:18,760 --> 00:38:21,000
Speaker 1: I do everything and every one of our clients. Does

807
00:38:21,040 --> 00:38:24,120
Speaker 1: I look at the end of the day, you know,

808
00:38:24,160 --> 00:38:25,880
Speaker 1: I go and off and go and say hi to

809
00:38:25,960 --> 00:38:28,600
Speaker 1: the teammates because that's kind of fun. So I try

810
00:38:28,760 --> 00:38:30,920
Speaker 1: if the bank's open, I'll go and say hello and

811
00:38:31,160 --> 00:38:33,880
Speaker 1: get some money out. But you know, like you like me,

812
00:38:34,040 --> 00:38:37,200
Speaker 1: like everybody you become. You know, if you look at

813
00:38:37,239 --> 00:38:40,959
Speaker 1: the way the money, so you're to date, about seven

814
00:38:40,960 --> 00:38:44,000
Speaker 1: percent more money got moved by Bank America consumers over

815
00:38:44,080 --> 00:38:46,720
Speaker 1: last year, so it's pretty healthy. If you look, twenty

816
00:38:46,719 --> 00:38:50,440
Speaker 1: five percent went by credit card movement payments uh in,

817
00:38:50,560 --> 00:38:55,520
Speaker 1: about fourteen percent went by uh uh checks and and

818
00:38:56,000 --> 00:38:59,160
Speaker 1: zell and other stuff. Cash was probably in a single

819
00:38:59,480 --> 00:39:01,839
Speaker 1: high single it's you know, so it's not a lot

820
00:39:01,840 --> 00:39:04,120
Speaker 1: of cash goes out the ATMs every day when you

821
00:39:04,160 --> 00:39:06,879
Speaker 1: put it against these other payments. So four trillion, four

822
00:39:06,880 --> 00:39:08,799
Speaker 1: and a half trillion will go out and cash, how

823
00:39:08,840 --> 00:39:10,520
Speaker 1: the aten to day is a couple hundred million, and

824
00:39:11,200 --> 00:39:13,400
Speaker 1: that's going on economy being spent. So a healthy consumer

825
00:39:13,440 --> 00:39:15,680
Speaker 1: spends money and that's good, but they use all the

826
00:39:15,719 --> 00:39:18,440
Speaker 1: device as cash is becoming less, but it's still critically

827
00:39:18,480 --> 00:39:21,319
Speaker 1: important and so that's why you have ATMs, and that's

828
00:39:21,320 --> 00:39:24,080
Speaker 1: why you have branches, and that's your small businesses receive

829
00:39:24,160 --> 00:39:26,840
Speaker 1: cash especially and bring in deposit, and that's why you

830
00:39:26,840 --> 00:39:27,640
Speaker 1: need a physical plan.

831
00:39:27,719 --> 00:39:29,359
Speaker 3: So if I go to your bank and I want

832
00:39:29,400 --> 00:39:33,279
Speaker 3: to make a deposit of ten thousand dollars in cash, yeah,

833
00:39:33,680 --> 00:39:36,480
Speaker 3: I'm going to get reported to the federal government. Yes,

834
00:39:37,360 --> 00:39:39,480
Speaker 3: and ten thousand isn't what it used to be.

835
00:39:39,640 --> 00:39:42,120
Speaker 1: Well, that's one of the one of the reforms are

836
00:39:42,160 --> 00:39:45,160
Speaker 1: saying is and somebody testified a few weeks ago to

837
00:39:45,200 --> 00:39:49,040
Speaker 1: this fact site. I'm paraphrasing their story, is they said,

838
00:39:49,320 --> 00:39:51,879
Speaker 1: when nineteen seventy two they set the ten thousand dollars level.

839
00:39:52,120 --> 00:39:54,120
Speaker 1: The theories even goes back to the forties. But just

840
00:39:54,200 --> 00:39:56,960
Speaker 1: let's just say nineteen seventy two and nineteen seventy two,

841
00:39:57,000 --> 00:39:59,080
Speaker 1: you could buy a full loaded Cadillac for ten thousand

842
00:39:59,080 --> 00:40:02,480
Speaker 1: dollars out this many years later, and we still report

843
00:40:02,760 --> 00:40:04,560
Speaker 1: not only if you did ten thousand, but if you

844
00:40:04,560 --> 00:40:06,320
Speaker 1: did three or four transaction a period of time that

845
00:40:06,400 --> 00:40:08,160
Speaker 1: looked like you were trying to evade the ten thousand,

846
00:40:08,400 --> 00:40:11,160
Speaker 1: we'd have to report that too. Well, the simple answer,

847
00:40:11,160 --> 00:40:13,000
Speaker 1: we're saying, just index set to where it should, which

848
00:40:13,000 --> 00:40:15,160
Speaker 1: would be like one hundred thousand. When you do that,

849
00:40:15,160 --> 00:40:19,359
Speaker 1: that takes out all this activity and moves it away.

850
00:40:19,520 --> 00:40:24,200
Speaker 1: And one hundred thousand dollars is the inflation adjusted amount

851
00:40:24,200 --> 00:40:26,239
Speaker 1: from fifty years ago for ten or maybe seventy eight

852
00:40:26,320 --> 00:40:28,200
Speaker 1: or eighty thousand, and so if you're saying lift that amount,

853
00:40:28,239 --> 00:40:31,840
Speaker 1: you'll take the average transactor completely off the table, and

854
00:40:31,880 --> 00:40:33,640
Speaker 1: you really will be looking for people who are trying

855
00:40:33,640 --> 00:40:36,799
Speaker 1: to move amounts of money or avoid the transaction level.

856
00:40:37,200 --> 00:40:39,520
Speaker 1: It's such a simple fix, and I think people can

857
00:40:39,560 --> 00:40:43,239
Speaker 1: see that. And by the way, in twenty two, in

858
00:40:43,360 --> 00:40:45,600
Speaker 1: twenty or twenty two, there was an act pass that

859
00:40:46,200 --> 00:40:48,719
Speaker 1: became law that gave the authority the Treasury to do that.

860
00:40:49,920 --> 00:40:50,839
Speaker 1: They just need to do it now.

861
00:40:51,640 --> 00:40:54,080
Speaker 3: So now you live in the Boston area as you

862
00:40:54,120 --> 00:40:59,280
Speaker 3: have for many many years, the main biggest headquarters I office,

863
00:40:59,360 --> 00:41:02,440
Speaker 3: I think you have or financial center offices in New York.

864
00:41:02,320 --> 00:41:04,200
Speaker 1: And your headquarters is in Charlotte.

865
00:41:04,560 --> 00:41:07,960
Speaker 3: Charlotte, So is that inconvenient for you to go all

866
00:41:08,000 --> 00:41:08,880
Speaker 3: these different places?

867
00:41:09,719 --> 00:41:13,239
Speaker 1: It's not, because we also travel all of It's like,

868
00:41:13,320 --> 00:41:15,000
Speaker 1: you know, I'm here today, I'll be in Florida for

869
00:41:15,040 --> 00:41:17,560
Speaker 1: a couple of days, and et cetera. So We move

870
00:41:17,600 --> 00:41:20,359
Speaker 1: all over as executives and big companies, and you do too.

871
00:41:21,239 --> 00:41:23,680
Speaker 1: But you know, the idea of moving people around and

872
00:41:23,760 --> 00:41:26,640
Speaker 1: moving their you know, where they work, and moving their families,

873
00:41:27,719 --> 00:41:31,960
Speaker 1: it's more difficult then, you know, we have twenty years

874
00:41:32,000 --> 00:41:34,120
Speaker 1: ago when we said we're moving the headquarters of Boston.

875
00:41:34,160 --> 00:41:36,120
Speaker 1: Thirty years ago, you just got to move. It was

876
00:41:36,120 --> 00:41:37,799
Speaker 1: not a question that you said, oh, maybe I got

877
00:41:37,840 --> 00:41:40,560
Speaker 1: a better idea. So as we look across that, we

878
00:41:40,640 --> 00:41:43,520
Speaker 1: have sixteen thousand plus people in Charlotte. We have about

879
00:41:43,560 --> 00:41:44,960
Speaker 1: the same amount when you take New York in the

880
00:41:45,000 --> 00:41:48,160
Speaker 1: areas around New York, but we also have five thousand

881
00:41:48,160 --> 00:41:52,240
Speaker 1: people in Boston. Around there, we have you know, thirty

882
00:41:52,239 --> 00:41:54,440
Speaker 1: five forty thousand people in the state of California. We

883
00:41:54,440 --> 00:41:57,000
Speaker 1: have twenty five thirty thousand people in Texas, you know,

884
00:41:57,040 --> 00:41:59,880
Speaker 1: so Florida. We have operations centers in Jacksonville. So you

885
00:41:59,880 --> 00:42:02,400
Speaker 1: have people everywhere. And the idea is we try to

886
00:42:02,400 --> 00:42:05,600
Speaker 1: always look at it and level load activity around the

887
00:42:05,640 --> 00:42:10,920
Speaker 1: country to avoid you know, to use time its own

888
00:42:10,920 --> 00:42:14,560
Speaker 1: differences to our advantage for call centers, and that's access

889
00:42:14,600 --> 00:42:17,560
Speaker 1: talent pools. And then remember all our branches and our

890
00:42:17,560 --> 00:42:22,560
Speaker 1: private banking teammates, our maryrial teammates, and our business lending

891
00:42:22,560 --> 00:42:24,919
Speaker 1: teammates across all the businesses. They're all in the field

892
00:42:24,960 --> 00:42:27,560
Speaker 1: during ninety seven hundred markets out there every day.

893
00:42:27,719 --> 00:42:30,360
Speaker 3: So if I wanted to buy make an investment in

894
00:42:30,360 --> 00:42:33,919
Speaker 3: a bank stock, would you say it's a good idea

895
00:42:33,920 --> 00:42:35,680
Speaker 3: to invest in bank stocks now? Or do you think

896
00:42:35,680 --> 00:42:37,239
Speaker 3: bank stocks may be overvalued?

897
00:42:37,320 --> 00:42:37,680
Speaker 1: Or what?

898
00:42:37,719 --> 00:42:38,160
Speaker 3: Do you think?

899
00:42:38,520 --> 00:42:42,880
Speaker 1: Our valuation difference to the S and P is lower

900
00:42:42,920 --> 00:42:45,279
Speaker 1: than it's been and I think our company is a

901
00:42:45,280 --> 00:42:47,440
Speaker 1: great value and rest the banks a pretty good day.

902
00:42:48,040 --> 00:42:52,120
Speaker 3: So now when you took over the bank, you had

903
00:42:52,120 --> 00:42:54,360
Speaker 3: more employees than you have today. The bank has expanded.

904
00:42:54,400 --> 00:42:56,320
Speaker 3: Why do you have fewer employees because your bank's so

905
00:42:56,400 --> 00:42:56,960
Speaker 3: much bigger.

906
00:42:57,280 --> 00:43:02,759
Speaker 1: So that's technology, and that's applied technology. In twenty ten,

907
00:43:02,800 --> 00:43:04,879
Speaker 1: we opened with two hundred and eighty two hundred eighty

908
00:43:04,920 --> 00:43:06,759
Speaker 1: four thousand ployees. We went up to three hundred and

909
00:43:06,760 --> 00:43:09,719
Speaker 1: five thousand to peak, and we ran as low as

910
00:43:09,719 --> 00:43:11,799
Speaker 1: two hundred and four thousand. Now we're about two hundred

911
00:43:11,800 --> 00:43:14,920
Speaker 1: and thirteen thousand, and so all that was done with

912
00:43:15,000 --> 00:43:18,960
Speaker 1: applied technology and digitization, new technologies both. So if you

913
00:43:18,960 --> 00:43:20,680
Speaker 1: think about work, the way to get rid of work

914
00:43:20,800 --> 00:43:24,320
Speaker 1: is to eliminate and re engineer the work and eliminate

915
00:43:24,320 --> 00:43:26,680
Speaker 1: steps and things like that. You can do that through automation,

916
00:43:26,760 --> 00:43:29,279
Speaker 1: you can do that through just not doing them, et cetera.

917
00:43:29,280 --> 00:43:32,040
Speaker 1: Goalay duplication. Then you can eliminate management of work because

918
00:43:32,040 --> 00:43:34,200
Speaker 1: if you have less people, you need less managers, and

919
00:43:34,200 --> 00:43:36,200
Speaker 1: then you eliminate the real estate that people sit in.

920
00:43:36,400 --> 00:43:38,560
Speaker 1: And so we've been doing that on and on again.

921
00:43:38,560 --> 00:43:41,319
Speaker 1: But the key to make it really move was technology.

922
00:43:41,480 --> 00:43:45,959
Speaker 1: And so whereas we had in twenty ten we would

923
00:43:45,960 --> 00:43:49,759
Speaker 1: have had five thousand, five hundred branches, we now have

924
00:43:49,760 --> 00:43:52,839
Speaker 1: thirty seven hundred branches. We actually have probably almost one

925
00:43:52,840 --> 00:43:55,480
Speaker 1: thousand those in places we did not have branches back then,

926
00:43:55,760 --> 00:43:58,480
Speaker 1: in different cities, and so if you think about maybe

927
00:43:58,760 --> 00:44:00,960
Speaker 1: six or seven hundred like that, so you think about

928
00:44:00,960 --> 00:44:03,880
Speaker 1: that those brains are bigger and more efficient, but all

929
00:44:03,920 --> 00:44:06,760
Speaker 1: the transactions that come out and what's in their sales

930
00:44:06,800 --> 00:44:09,440
Speaker 1: activity and relationship activity, and so it's just that concept

931
00:44:09,440 --> 00:44:11,000
Speaker 1: re engine We have this thing called opt X. Every

932
00:44:11,080 --> 00:44:13,719
Speaker 1: year we come up with thousands of IDAs to take

933
00:44:13,719 --> 00:44:17,600
Speaker 1: out and re engineer the company and so at the

934
00:44:17,680 --> 00:44:21,240
Speaker 1: end of the day, more customers, more activity more people,

935
00:44:21,440 --> 00:44:24,279
Speaker 1: and yet you've driven the head count down and our

936
00:44:24,520 --> 00:44:28,359
Speaker 1: costs are two thirds people and then basically the other

937
00:44:28,440 --> 00:44:34,360
Speaker 1: third is some advertising, the buildings, technology and electricity.

938
00:44:34,400 --> 00:44:37,360
Speaker 3: And now there's an acronym today that some people in

939
00:44:37,480 --> 00:44:42,080
Speaker 3: Washington don't like, called DEI. Do you have a DEI

940
00:44:42,239 --> 00:44:44,400
Speaker 3: policy or not anymore?

941
00:44:43,760 --> 00:44:48,480
Speaker 1: We have diversity inclusion in our company. But let's step back.

942
00:44:48,560 --> 00:44:50,600
Speaker 1: What we've always been as a bank of opportunity. So

943
00:44:50,760 --> 00:44:54,719
Speaker 1: we think about creating an opportunity for our teammates. And

944
00:44:54,800 --> 00:44:57,120
Speaker 1: how do we do that. We go out and hire

945
00:44:57,200 --> 00:45:00,600
Speaker 1: from all areas and bring people in to our companies.

946
00:45:00,600 --> 00:45:02,880
Speaker 1: So we go to four hundred different schools to recruit kids.

947
00:45:03,160 --> 00:45:06,520
Speaker 1: We go we have a program we called Pathways. So

948
00:45:06,560 --> 00:45:08,879
Speaker 1: Pathways we announced in twenty eighteen, we said we'd hire

949
00:45:08,960 --> 00:45:11,759
Speaker 1: ten thousand people from low and modern income neighborhoods to

950
00:45:11,760 --> 00:45:15,440
Speaker 1: come work in our company. We complete the first ten thousand,

951
00:45:15,560 --> 00:45:17,200
Speaker 1: then we went out and said we'll do another ten thousand.

952
00:45:17,200 --> 00:45:19,520
Speaker 1: We're up to thirty thousand people over the last decade

953
00:45:19,520 --> 00:45:23,040
Speaker 1: almost that we've hired from LMI communities to come work

954
00:45:23,080 --> 00:45:26,480
Speaker 1: for our company, from high school, junior college, and colleges

955
00:45:26,520 --> 00:45:29,880
Speaker 1: to come work. So once we have a very diverse

956
00:45:29,880 --> 00:45:32,400
Speaker 1: company in terms of representation from all economic status, all

957
00:45:32,480 --> 00:45:36,120
Speaker 1: races and ethnicities. Once they get in, the opportunity is

958
00:45:36,120 --> 00:45:38,680
Speaker 1: there of a lifetime. We equal pay for equal work,

959
00:45:38,760 --> 00:45:41,399
Speaker 1: the ability to promote, we train, we do all the work,

960
00:45:41,440 --> 00:45:43,840
Speaker 1: and so the idea is that's an opportunity. When we

961
00:45:43,840 --> 00:45:46,040
Speaker 1: look outside our company, we try to work with other

962
00:45:46,040 --> 00:45:48,839
Speaker 1: employers to create the same opportunity we create. We try

963
00:45:48,840 --> 00:45:51,719
Speaker 1: to work with nonprofits and communities to create opportunity for

964
00:45:51,760 --> 00:45:55,080
Speaker 1: them to be successful. And so the idea is just

965
00:45:55,120 --> 00:45:58,000
Speaker 1: create opportunity. So we have a diverse team, we have

966
00:45:58,360 --> 00:46:01,000
Speaker 1: we stressed inclusion. When you're at our company, you can

967
00:46:01,040 --> 00:46:03,480
Speaker 1: be who you want to be and be successful. Including

968
00:46:04,239 --> 00:46:08,120
Speaker 1: we have three hundred thousand memberships in our employee resource groups,

969
00:46:08,160 --> 00:46:10,719
Speaker 1: of which about sixty percent of people are in one.

970
00:46:11,160 --> 00:46:14,440
Speaker 1: The average SMP company five hundred company has five percent employees.

971
00:46:14,440 --> 00:46:17,120
Speaker 1: Our employees love to work together, they're open to all,

972
00:46:17,280 --> 00:46:19,800
Speaker 1: even though at coolhort and so we just try to

973
00:46:19,800 --> 00:46:20,560
Speaker 1: create opportunity.

974
00:46:20,560 --> 00:46:22,920
Speaker 3: Now that's a young profession. Young person's graduate in college,

975
00:46:22,920 --> 00:46:25,720
Speaker 3: why should they go into the banking profession as opposed

976
00:46:25,760 --> 00:46:31,640
Speaker 3: to private equity investment, banking, healthcare. What's the appeal of

977
00:46:31,800 --> 00:46:32,600
Speaker 3: working in a bank.

978
00:46:32,920 --> 00:46:36,279
Speaker 1: Well, when we bring the two thousand kids in and

979
00:46:36,719 --> 00:46:38,600
Speaker 1: I talked to them, I always say the same thing.

980
00:46:38,920 --> 00:46:40,239
Speaker 1: You can make a lot of money doing a lot

981
00:46:40,280 --> 00:46:43,279
Speaker 1: of things. You can have a great career, do a

982
00:46:43,320 --> 00:46:45,160
Speaker 1: lot of things. But if you're going to come to

983
00:46:45,200 --> 00:46:47,560
Speaker 1: our company, you really want to help people. You want

984
00:46:47,600 --> 00:46:52,040
Speaker 1: to provide the answer. Our market position is what would

985
00:46:52,040 --> 00:46:54,080
Speaker 1: you like the power to do? And I said, your

986
00:46:54,200 --> 00:46:56,560
Speaker 1: job at this company is to help people answer that question,

987
00:46:56,600 --> 00:47:00,800
Speaker 1: whether it's a customer, whether it's a teammate, there's a shareholder,

988
00:47:00,920 --> 00:47:03,040
Speaker 1: whether it's a community, And you've got to come and

989
00:47:03,080 --> 00:47:04,799
Speaker 1: want to do that. You want to deliver a lot

990
00:47:04,840 --> 00:47:08,960
Speaker 1: of profits done the right way with a purpose around it.

991
00:47:09,000 --> 00:47:11,600
Speaker 1: And if that's what makes the place special in our

992
00:47:11,640 --> 00:47:14,680
Speaker 1: turn of rates and all time low, it's and we

993
00:47:14,719 --> 00:47:16,839
Speaker 1: are sought after by young kids to work. So here

994
00:47:16,840 --> 00:47:20,160
Speaker 1: everybody's going to tech companies and stuff. It's we have

995
00:47:20,480 --> 00:47:23,799
Speaker 1: hundreds of thousand applications for the two thousand higher.

996
00:47:24,360 --> 00:47:27,320
Speaker 3: Your Bank of America is mostly focused in America, I assume,

997
00:47:27,480 --> 00:47:29,560
Speaker 3: But do you have a lot of business outside and

998
00:47:29,640 --> 00:47:31,880
Speaker 3: do you want more business outside of the United States.

999
00:47:31,960 --> 00:47:36,040
Speaker 1: Yeah, we do business one hundred and thirty countries. We're

1000
00:47:36,360 --> 00:47:39,000
Speaker 1: in thirty forty core countries. We've been in like I said,

1001
00:47:39,040 --> 00:47:41,560
Speaker 1: in Japan that you have for eighty years now, in

1002
00:47:41,560 --> 00:47:45,000
Speaker 1: India for sixty five years, and Brazil since nineteen fifty four,

1003
00:47:45,040 --> 00:47:47,799
Speaker 1: in Argentina since nineteen fourteen. You know. So we have

1004
00:47:47,800 --> 00:47:50,719
Speaker 1: an national business. And the amount of loans we have

1005
00:47:50,760 --> 00:47:54,000
Speaker 1: outside the United States for commercial customers exceeds what we

1006
00:47:54,000 --> 00:47:55,960
Speaker 1: have in the United States and for large corporate customers.

1007
00:47:56,000 --> 00:48:00,400
Speaker 1: So we're a global business for global investors, global firms,

1008
00:48:00,400 --> 00:48:05,120
Speaker 1: that private equi firms, global investors, global companies. And so

1009
00:48:05,160 --> 00:48:09,160
Speaker 1: we do investment banking, corporate banking, treasure, cash management, and

1010
00:48:09,239 --> 00:48:12,399
Speaker 1: trading across the world. And we're you know, the top

1011
00:48:13,760 --> 00:48:15,839
Speaker 1: two three in the world. And these businesses going back

1012
00:48:15,840 --> 00:48:18,359
Speaker 1: to you early point that the US companies that come

1013
00:48:18,400 --> 00:48:20,279
Speaker 1: to dominate those businesses were right at the top.

1014
00:48:20,400 --> 00:48:22,840
Speaker 3: Were you ever at a cocktail party or lunch and

1015
00:48:22,920 --> 00:48:25,480
Speaker 3: somebody gives you a resume that ever happened to you?

1016
00:48:25,520 --> 00:48:27,560
Speaker 3: If somebody they thinks should be hired by the bank.

1017
00:48:27,480 --> 00:48:29,440
Speaker 1: There's this thing called email that gets in their fashion.

1018
00:48:30,200 --> 00:48:34,040
Speaker 3: Right, and now on the personal side, You've been there

1019
00:48:34,120 --> 00:48:37,279
Speaker 3: fifteen years, you haven't announced any time, and you might

1020
00:48:37,360 --> 00:48:39,840
Speaker 3: step back and you're not prepared to announce that today.

1021
00:48:39,640 --> 00:48:42,960
Speaker 1: Right, No, I don't thin, So I'll tell you first.

1022
00:48:43,040 --> 00:48:46,040
Speaker 3: Okay, So have you been able to convince your children

1023
00:48:46,080 --> 00:48:47,439
Speaker 3: to go in the banking world.

1024
00:48:48,120 --> 00:48:51,040
Speaker 1: My oldest son's an investment banker for a different firm, obviously,

1025
00:48:51,120 --> 00:48:55,920
Speaker 1: in my middle child is a risk manager for another

1026
00:48:55,960 --> 00:48:59,600
Speaker 1: firm in financial services, and my youngers and communications, and

1027
00:49:00,000 --> 00:49:04,880
Speaker 1: I think I never said, Look, being a CEO's child

1028
00:49:05,000 --> 00:49:07,799
Speaker 1: is not the easiest thing being a CEO's spouse. So

1029
00:49:07,840 --> 00:49:12,120
Speaker 1: they and they saw me work in different ways across

1030
00:49:12,160 --> 00:49:15,520
Speaker 1: the years, and so it's their decision with their careers.

1031
00:49:15,560 --> 00:49:19,239
Speaker 1: And it's nice. My son, he's a deal doer, he's

1032
00:49:19,280 --> 00:49:21,279
Speaker 1: an m and a type of guy. So it's fun

1033
00:49:21,280 --> 00:49:21,879
Speaker 1: because I used.

1034
00:49:21,800 --> 00:49:22,080
Speaker 2: To do that.

1035
00:49:22,080 --> 00:49:23,080
Speaker 1: I haven't done that long time.

1036
00:49:23,200 --> 00:49:26,040
Speaker 3: What do you do for rest and relaxation all your

1037
00:49:26,080 --> 00:49:26,720
Speaker 3: spare time?

1038
00:49:27,840 --> 00:49:29,839
Speaker 1: You know, I do whatever else does.

1039
00:49:31,320 --> 00:49:33,800
Speaker 2: And that was David Rubinstein speaking with Bank of America

1040
00:49:33,920 --> 00:49:38,560
Speaker 2: Chief Executive Officer Brian moynihan at the Economic Club of Washington,

1041
00:49:38,680 --> 00:49:39,319
Speaker 2: and you can watch

1042
00:49:39,320 --> 00:49:42,319
Speaker 1: More of that interview on The David Rubinstein Show Peer

1043
00:49:42,400 --> 00:49:46,279
Speaker 1: to Peer Conversations on March twelfth at nine pm in

1044
00:49:46,360 --> 00:49:46,799
Speaker 1: New York