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Influencers Transcript: Brian Moynihan, January 23, 2020

ANDY SERWER: In Davos, the world's top leaders contend with the planet's most pressing problems. Brian Moynihan's voice carries further in those discussions than just about anybody's. As CEO of Bank of America, one of the largest financial institutions on earth, Moynihan oversees more than $2 trillion in assets and employs over 200,000 people, serving tens of millions of customers across 36 countries.

Embracing his role as an agenda setter, Moynihan sits on the World Economic Forum International Business Council and the Business Roundtable. He's here to talk about what's next for global finance, amid threats like climate change, trade wars, and wealth inequality.

Hello, everyone. I'm Andy Serwer, and welcome to "Influencers." And welcome to our guest, Brian Moynihan, CEO of Bank of America. Brian, great to see you.

BRIAN MOYNIHAN: It's great to be here, Andy. Thanks for taking the time.

ANDY SERWER: And Brian, of course, we're here in Davos, Switzerland, at the annual meeting of the World Economic Forum. And you are chairman of the World Economic Forum's International Business Council. And can you tell us a little bit about what that is and what you do.

BRIAN MOYNIHAN: Sure. I think it's best if everybody will understand what it is. It's about 130 of the larger companies in the world-- the CEOs. And it's a-- it runs in partnership of the IBC, and there's a chairman's group and then an owner's groups. So there's three groups kind of run together. But the IBC represents the largest companies.

And this year, we're working hard on trying to align stakeholder capitalism, Klaus' vision from 50 years ago that's progressed through the time with, you know, sort of real metrics that can measure it. So we can show that companies can both make good money and deliver for their shareholders and teammates and customers and deliver for society. But how do we measure that to make sure we're doing it?

ANDY SERWER: Yeah, measuring, let's jump right into that because there are some talk that you are actually spearheading an initiative to sort of create some standards when it comes to ESG.

BRIAN MOYNIHAN: Right. And so Klaus started-- 50 years ago, said, we need stakeholder capitalism in response to the view that the shareholder is supreme, expressed by Milton Friedman and the others. You travel through time, and Davos has been a leader in trying to get-- convening all the [? different ?] groups to talk about it.

2015, the UN says the sustainable development goals are developed by 190 countries, saying, this is what society needs from the world to make progress. 2017, the companies in the IBC and beyond signed and said, we will make progress on the SDGs. 2019, we got to then measure that progress and get the owners of the assets, the investors in the world, to the people that give the assets to manage it. The asset manager firms-- the operators-- aligned around goals that show you're making progress. Otherwise, it's just talk. And that's the teeth we're trying to put into it-- real metrics using currently available systems, but getting them organized, the companies can commit to them, disclose them, and show they're making progress on the SDG key pillars.

ANDY SERWER: And are you doing that this week? Are you making progress meeting with people?

BRIAN MOYNIHAN: We've been working on it. The group's been working on it-- the WEF and the four accounting firms have been driving it for us, along with representatives of various companies. And so that has produced a white paper, so to speak, that is the start of going through the companies and sort of making sure we got it right from all the participants-- from the operators-- I mean, companies like Bank of America; from the investors, Larry Fink and BlackRock; and from the owners meeting the $3 trillion of clients we have in Maryland, our private bank, who put their money with people like Larry. And so that's we're trying to do, and that's the work over the next year or so.

ANDY SERWER: Yeah, do you have a timetable on when you think that this is going to be rolled out?

BRIAN MOYNIHAN: Well, we're rolling it out today to the [? debt ?] group. And then, the idea is to-- is to codify it more. And we meet in the summer in August. And we'll hopefully get the work done. And there's no new metrics here. It's an organization of SASB and GRI and all these different metrics are--

ANDY SERWER: They're just sort of conflicting metrics, or not necessarily conflicting, but just different metrics?

BRIAN MOYNIHAN: Well, so, if you really want to back up and say, why do you need to do this? The SDGs requires $6 trillion dollars a year-- a year. OK, that's a lot of money.


BRIAN MOYNIHAN: We do about $2 trillion a year to support them.


BRIAN MOYNIHAN: The sustainable development goals by the UN to implement what-- the metrics are underneath those goals, it takes $6 trillion a year. The [? world's ?] charities and the wonderful institutions that go through all that do about $800 to $900 billion of charitable giving a year, so not enough to make it. The endowments of the world have about a trillion a half dollars in them. Again, if they empty them, not enough to make it. So-- and the governments of the world are all operating in deficits and spend a lot of money on this stuff, but they don't have a trillion or two to throw on the table across the board, even the US is the biggest government.

So what's going to actually drive to success is getting capitalism aligned. So you move from our charity, which is $250 million a year, to our whole operating, which is $53 billion in operating expense, and how we position that with our suppliers, with our-- our energy consumption all to drive the change along the SDG's.

And so if you think about that, our 2 and 1/2 trillion dollar balance sheet doing business for our clients to help them make the change on the environment-- for example that's a $300 billion environmental program where it just kicked off again. That alignment between companies and the goals will help bring the money to get that $6 trillion funded. Without that, we're never going to make the kind of progress we'd like.

ANDY SERWER: Right. Greta Thunberg, the activists, just spoke here, Brian, and said that she didn't think any progress had been made when it comes to reducing carbon emissions.


ANDY SERWER: What do you think about that?

BRIAN MOYNIHAN: Well, the idea is, are we making progress? The answer is yes. Is the question, fast enough, we should make it faster. And I'm a pragmatist. The debate about what might happen 50 years in the future can be avoided by people arguing about-- in my mind, about the outcomes and the variables across 30 years or 50 years. A little bit of change in variables-- there's a great debate about whether people are overstating the impact of this and understating eco-- that's all uninteresting in some ways.

We believe, and the companies who have signed the SDG's believe we have to make progress in SDGs. So what are we going to do tomorrow to make a step? So we are carbon neutral this year. We actually completed it last year. We had a $25 billion that when to $50 billion that wen to $125 billion environment [? commit ?] we completed in four years. It was supposed to be 10 years.

Now, we're doing $300 billion over 10 years. We have-- and to do that, you have to have a business proposition. It's not just interesting work. It has to be really core to businesses. So we're driving that. And companies, like ours, are doing that around-- around the world. So we have to make more progress. I don't-- I completely agree with that. But the way is to get everybody motivated and pushing hard.

For us to say we're carbon neutral and for an oil and gas company to say it's carbon neutral are two different questions, because that's their business. And we have other businesses. But the bridge between it is, if we're going to provide funds to them-- lending to them and stuff-- we need them to be making progress, [? so society ?] thinks they're making the transition happen.

And when you see oil and gas companies commit to it, that way we should lend to those companies to help them make progress faster, rather than divest from them, which won't help them at all.

ANDY SERWER: Oh, that's your take on the fossil fuel industry, then?


ANDY SERWER: You [? don't ?] want to be a participant?

BRIAN MOYNIHAN: We are a participant, but what we want to do is, we want them to drive themselves to make the change. So we did a--

ANDY SERWER: Do you ever talk to them about actually--


BRIAN MOYNIHAN: --the two-- on the International Business Council are a bunch of oil and gas companies and electric power producers, et cetera. So I was on a panel with Lynn Good, who runs Duke Power, and she's on the IBC. And we're going down the panel, and she made-- was talking about her commitments of her company as a power generator to be-- reduce its carbon emissions by half by such and such a date and higher. And the people just let it go by without thinking-- without sort of saying, wow, you know?

And I stopped the crowd and said, wait a second. Think about that. That's a power company. If they're moving that kind-- with that kind of pace, and we are saying we need more sort of energy to meet our goals, that business system will get more progress. And so, yes, we got to make more progress. We've got to make it faster. But we've got to do it in an aligned line way. Otherwise, we're dependent on the charity or the tax benefits or something to drive it.

And so we-- we are the largest green bond financer. And those go into companies that make changes. We did a deal with a power company that made a simple covenant, for lack of a better term. If we're not 50% alternative by such and such a date, the interest rate goes up.

ANDY SERWER: I mean, you seem really passionate about this. You're really running a bank, also, right?

BRIAN MOYNIHAN: Because in the end of the day, we're only going to be as good a society. You know, what-- how does a bank make its money? When societies prosper and economies grow. And if we believe that the tariff climate is going to be such that it's going to slow down growth or hurt growth or cause risk, you know, we need to help get through it.

Now, we have to be realistic that it's going to take everybody making changes in my mind, not any one magic idea or any one magic technology. And so, whether it's about the climate, about our human capital, how we-- we're $20 and hour this quarter for every starting high school-- you know, back in your high school days, if you interned for us, you would get a $40,000 a year annual pay rate today.

If you work 20 hours a week, you get full benefits. The living wage component, that's like $60 an hour to give you a sense. So these are-- these are-- or $40 and hour or $50 and how. If you think about these things, these are commitments we make as a company in the way we operate that then have societal benefit. And I think you have to do both. And so the environment is just one of them.

ANDY SERWER: I want to ask you, too, about that pay, because that's an important issue, as well. Another speaker here today, of course, is President Trump. You're going to be meeting with him with the International Business Council. What's going to be on your mind? What do you think the dialogue is going to be with the president?

BRIAN MOYNIHAN: Well, I think the dialogue when you have a bunch of businesses that are largest companies in the world is always going to be about trade policy and, you know, the phase one deal and USMCA and the European deal, and-- and the tariff deal on-- or the tax deal with technology taxes that France and the United States signed.

Any of the economic policy along that dimension is critical for companies to be able to plan. And so I think that'll be the-- most of the dialogue with him around that. [INAUDIBLE] about geopolitical risks and all the other topics of the day, but at the end of the day, the business community wants to be able to engage in business and help drive that economic growth and be a catalyst to make it happen. And to do that, they need certainty. And they want to hear from heads of state, whether it's the president or [INAUDIBLE] or whoever, about, you know, how we're going to have that stability so we can grow.

ANDY SERWER: The president tweeted out right before he came here, going to Davos, bring-- to bring, quote, "additional hundreds of billions of dollars back to the United States of America." Do you know what he was referring to?

BRIAN MOYNIHAN: That-- that one, I'm not sure about. We'll have to-- we'll have to let him speak.

ANDY SERWER: Maybe you can ask him about it when you see him. So Brian, you've been CEO of the bank for pretty much 10 years now. What should we take away from your tenure?

BRIAN MOYNIHAN: Well, I think we have done a lot of great things in the company. And often, when people think of my tenure, it started in 2010, January 1. So you had the crisis sort of starting to come through. But the aftermath of the crisis was severe. And as the largest mortgage lender in the country, one of the largest credit card lenders in the country, all the things that were going on with unemployment and the mortgage issues and all that affected our company dramatically.

And so a lot of people shape up the first half of the decade about that. But the reality was, underneath that, we were investing $3 billion a year in new technologies, expanding our mobile platform, expanding our digital platform. We were retooling our whole branch system. We were changing out all our ATMs to ones that you can touch with a phone.

So the interesting thing is, we've both-- you know, we walked and chewed gum. We basically dealt with the issues that we had to put behind us. And people say, war time, peace time. But we had-- you know, that was the war of time. But on the peace time, we were investing heavily.

And so after a decade that, people are now seeing record earnings in 2019, record earnings in 2018, more record in 2019. They look at it and say, where does this come from? You say, it was always there. Just as we cleaned away the issues of the past, you could see that earnings stream come through for the shareholders. And that leads to top sharer returns against the industry, against the peers, et cetera.

When you think about it from customer-- customer score is the highest, teammates scores the highest, and the team has done a great job to balance all the constituencies. And during that 10 years, 2 and 1/2 billion of charitable giving, $50 billion of low and moderate income--


--largely around housing, 20 million volunteer hours by our teammates. So we've made progress on the things-- our environmental commitments I talked about. That's the interesting thing. We've been able to both deliver great returns-- 15.8% return on equity last year-- and deliver for society and improve the company, all during a time when people were concerned about what was going on.

ANDY SERWER: And it took a while, though, I mean, for the stock to respond. And the stock has basically tripled since 2016.


ANDY SERWER: It's up from $3 in the spring of 2009 to, what, $35-ish today. But did you ever have doubts? I mean, people doubted you. They said, eh, we don't know if he's the right guy for the job. Did you ever have doubts, yourself?

BRIAN MOYNIHAN: No, because I-- we had a great team, and they knew what they were doing. It was helpful to have people from inside the company understand what got us in there. And we have lessons learned that we never want people to get. And now, you're 12 years-- the first signs of the cracks were '06. So you're, you know, 13, going onto 14 years, after housing started going down.

And so we always have to remind teammates that, you know, things don't always go right. In all things in moderation is our theme we use in balancing the company's debt. That's one of things we work on and worry about. But if you think about the company overall, the team's done a great job.

And you know, we're-- we're making progress on the-- our eight lines of business. The market share is growing, doing it the right way, doing at the right risk, and providing good returns, and doing it on a basis that what we call operational excellence, which drives the investment capability to continue that $3 billion in technology, to continue to $1.7 billion in capital expenditures we do each year, to continue moving employees at $20 an hour and special bonuses that were a million-- a billion and a half dollars. These are all important things to help drive the company.

ANDY SERWER: Yeah. I mean, where do we go from here, then, with B of A, though, Brian? I mean, you guys have talked about doubling the consumer business. You have an opportunity there you think. What about the economy and the macro environment? And you know, how much longer-- what can the expansion go beyond this, what, 11 years now?

BRIAN MOYNIHAN: Well, the answer is, it'll go as long as it goes, because everybody predicted it to be over in 2011 when Chairman Bernanke said we're going to keep them low for longer. People thought we were going to tip back in recession. We didn't.

You know, and last year, August, the yield curve inverted for a few days. Everybody-- oh, we're going into recession. We haven't. And so I think the idea is, it's-- the United States has this unique thing now. We're not growing as fast as we'd like, but underneath that, what's driving it is the employment levels, the wage growth that's coming on stronger, deepened cycle, and in the spending of consumers.

So when you look in our consumers during the 2019, $3 trillion moved through debit or credit card spending, checks written, cash out of the ATMs, P2P payments under Zelle, bill payment-- $3 trillion, so it's not a small sample. And that grew by 5.9% over '18. It's still growing today-- the first part of this year, about a 5% rate.

That means, in the end of the day, the consumer will be in pretty good shape, evidenced by their activity. That will help drive the economy.

What it means to Bank of America-- we have tremendous opportunity. And so when I talked about doubling our market share in consumer, it was against a question, well, is there any opportunity left for you? You're so big. The idea is, our real market share-- we're the number one retail bank in the US. We're number one retail bank in the top 30 markets, but we're only number 1 in 12 of them. And we weren't in seven until two years ago.

So there's just this plenty of opportunity to organically grow. And there's no constraint because the market's so unconsolidated. And so that's what we're challenging our team to do. How you drive that kind of growth, whether it's in wealth management, whether it's commercial banking, consumer banking, or capital markets?

ANDY SERWER: The low interest rate environment, though, is tough for-- for banks, and in particular, Bank of America. Don't you anticipate this continuing for some time? And isn't that going to be a wind in your face?

BRIAN MOYNIHAN: Well, it's going-- if you think where the rate environment is now, it's always easier when it's highest, when you have a trillion four of deposits. You have $700 billion-- those are consumer deposits. Of the trillion four, $400, $500 billion-plus our non-interest bearing. So they mean more to you when rates are higher than they're lower. And that's the natural squeeze that goes on.

But the reality is, the current rate environment is only back to where it was a couple of years ago when we had, then, record earnings. So we can do it because the cost effectiveness and how we've invested and how we've driven the cost down for three-- two or three years, we've been operating at cost in a company basically flat to slightly down. For 10 years, it's come down every year. The last three years have flattened out because we got a lot of stuff out. But that operational excellence enables to make more money and have operating leverage, even if rates aren't exactly where it might be easier for us to make the money.

ANDY SERWER: Yeah, but it's not great for your net interest margin, but you can still get the job done. And why is bond trading so good for you guys right now?

BRIAN MOYNIHAN: Well, when you have what happened in the fourth quarter, where there was a lot of volatility because of a lot of activity-- a lot volatility because a lot of market activity. Rates were moving around. Currencies were moving around. Things are being resolved and unresolved. All that's good.

But the caution I'd say to people, if you look at fourth quarter of '19 and fourth quarter '16, for basically all the industry participants, it's relatively flat. And what happened was we came down as an industry and came back up. Some people came down more because a difference in their business models. Some people didn't.

So you know, I think we have to be careful that we run the market's business that Tom Montag and the team run to really deliver for investor clients and help bring the companies to market. And so it will always be one of the-- one the smaller businesses, in terms of earnings power. But that's because it's balanced against the company. And we're very pleased with what they do. They had a good quarter. Hopefully, it happens every quarter. But you know, it's market. So sometimes people sit on their hands and things get quiet.

ANDY SERWER: If you can whisper into Jay Powell's ear right now, Brian, what would you tell him?

BRIAN MOYNIHAN: I think-- I think they've done what they need to do, which is, you are in unprecedented times in the length, the duration of the expansion. And so he's-- he's in a unique position. No chair has ever been here before. And what they've done is watched closely to see where the impacts of things outside the United States or the impacts of things-- you know, slowdown and business confidence or spending in 2019-- as you sort of went through the inventory correction and the equipment spending fell off.

He basically said, we need to give a little insurance. And they did. And I don't think he's-- I-- maybe before he did it, I could have given you some insight as to how he thought about it if I do-- but the reality is they're very transparent. And they're kind of done with that. And that's the point-- is that as long as unemployment's at three and a half and wages are growing and the economy is growing, they have given enough to make sure that that duration of cycle lengthens out.

And I think the markets responded well to that. And I think that's a-- but he's in a-- he and the Fed, generally-- the Open Market Committee-- are in a place that no one's ever been. It's the longest duration and the largest economy in the world. And so from 2010-- 2007 to now, the US economy has grown by $7 trillion of size or $8 trillion or something like that. The rest of the economies-- the European economies are basically flat across that time. $18 trillion, $17 trillion, US [INAUDIBLE].

So if you think about it-- and China's grown-- to engineer that to keep happening at the size, it requires us to do a lot of work as capitalists and driving investments and things like that. And it's a different art for the Fed.

ANDY SERWER: Can the expansion continue? And if so, what would drive it?

BRIAN MOYNIHAN: What's going to drive it is the power of innovation, the power of the consumer [? is in ?] the United States, in the terms of the United States expansion. And so our predictions are 1.7% GDP next year growth for United States.

We have the number one research team in the world. And Candace Browning-Platt and the team run it. Their at 1.7%. There's risk to the upside for that if more things fall in place along all the dimensions of the [INAUDIBLE]. And there's risk of downside if they deteriorate. But they're reality is 1.7 is slower than this year. And that-- that is part of what, you know, everybody's worried about as the economy has been slowing down and the question, would they bottom out and come out? And you're seeing in the US, it's kind of bobbing out above where people predicted the slowdown, too. And that's been good.

And that's largely been driven by jobs and employment. When you talk to our corporate clients or commercial clients and our small business clients, hiring people is the number one issue. And they just can't get enough people. And so even with all the work we've done for special bonuses in our company, and if you work in a company for the last decade and you've started at $50,000, you've had average annual wage and salary increases of 6%, 8%, 10%, 12%, all the way up to half a million and under, to give you a sense, per year.

And yet, our turnover rate is down, but it still ain't nothing. And that means that's the strength of the job market. And so I think that's strength of the job market, the strength of consumer spending, credits in good shape, consumers have borrowed responsibly, and companies can't find them. That's the real constraint on the economy.

And housing, they can't get enough people to build the houses, yet it's coming back a little bit. So we'll-- we'll see play out. I think that gives you good confidence if the expansion continues to expand.

ANDY SERWER: I mean, is this because of Donald Trump, Brian? I mean-- or is it because of Jay Powell because of Brian Moynihan? Animal spirits?

BRIAN MOYNIHAN: I will tell you this. We've been-- we've been in business since 1784 in the oldest parts of a company. And Brian Moynihans will come and go. Presidents will come and go. Chairs of the Fed will come and go. Yet, the power the US economy is pretty interesting.

And so 50 years ago, the US employed half the people they employ today-- 70 to 150 million. The population went from 200 to 300 million-- to-- and [? changed ?] [? at ?] 330. Think about that dynamic and what was going on in 1969 and '70-- Vietnam, Watergate, Kent State, the riots in Chicago, the [INAUDIBLE], the state of race relations in the United States, the advent of the computer came on. And still, you employed twice as many people.

So the US economy just has a way of grinding through, because that innovation, the capital is there-- the capitalist spirit-- and it works better than any economy in the world. And that's one the things we're trying to get everybody understand is you can be capitalist and do-- and make progress for society. But don't challenge capitalism. It led to 80 million more Americans working than 50 years ago. That's a good thing.

ANDY SERWER: Or is that a nod to Bernie Sanders and Elizabeth Warren, when you're saying, don't knock capitalism?

BRIAN MOYNIHAN: It-- they'll-- as I said, we'll get through this election like we've gotten through all of them. And whatever comes out of it, you know, that's what the American people voted. And we'll run the company well in whatever happens.

ANDY SERWER: When you're talking about the power of the American economy, you sound a lot like Warren Buffett, which maybe makes sense, because he's a big believer in your institution right now. Do you talk to Buffett? And what do you guys--

BRIAN MOYNIHAN: Well, he's--

ANDY SERWER: --chat about?

BRIAN MOYNIHAN: You know, he's been a shareholder of ours since 2011. And then, he then-- public disclosure, he bought a lot more stock in the middle of '18 and middle of '19. So he owns over 10%. And he's applied to keep that going up because of the bank holding company technical rules. He has to make an application.

ANDY SERWER: And that's a big endorsement of you.

BRIAN MOYNIHAN: Well, it's a big endorsement of me and the team and what we're doing. And I think he sees a great franchise that has great capabilities and generates great returns for him and [? all those ?] other shareholders. If you would have invested in the same day Mr. Buffett did, you'd gotten the same return he did. The question is, did you have the courage to do it? And by the way, did you have the courage to do it with the size investment he made, even including the preferred dividends and the warrants and all the stuff that people say?

Yeah, the reality is, if you just would have bought our preferred, you could've gotten a 10% yield that day. And if you bought our common, you would have written it up at less price. So the reality is he's done well, but the whole shareholder base has done well. And that's because the team's done a good job.

ANDY SERWER: Now, maybe that means you're going to stick around for a while. I've read that you said you're going to stay as long as the board will have you. You're having fun. You don't see doing anything else. Does Buffett talk to you about, Brian, and make sure you stay in that chair for awhile?

BRIAN MOYNIHAN: Oh, no, he doesn't. he's a-- he's an investor. So he-- I hope he'd want me to stay, because I hope the board wants me stands. And as a 10% holder, you want him to want you to stay. But that's a different question. You'll have to ask him that. But-- and I-- we've done a good job for me, and he's been a great supporter. And we really value it.

But the broader context, this is an unbelievable company. And what we can do with our six-- 200,000-plus teammates or 600,000 family members that work with us and how we think about mental wellness and physical wellness and health care benefits and keeping health care benefits flat for people in the lower pay categories for years and having grow at one third the rate of an increase in the company, all these things are incredibly important to run the company my team and we believe is the right way. And so we just think there's so much opportunity ahead of us to continue to drive that.

ANDY SERWER: You're talking about your employees, Brian. And you grew up in a large family. You guys had to scrimp and save. You know, it wasn't a wealthy family by any means. Do you think that that gives you an appreciation for working people, generally and particularly-- in particular at the bank? And you said you're paying people more, and you're going to go to $20 an hour, I think, within the next couple of years--

BRIAN MOYNIHAN: Next couple of weeks.

ANDY SERWER: Next couple weeks, right, because it's this year.

BRIAN MOYNIHAN: This quarter.


BRIAN MOYNIHAN: This quarter.

ANDY SERWER: This quarter. Do American companies need to step up and pay workers more?

BRIAN MOYNIHAN: I think-- I think our company believes that we had to. And it's not just because it's good for the employees. It's also good for the stability and the turnover and all those things. But we're really showing is career path for people. And that goes into-- the term you'll hear about in Davos is called "reskilling."

Inside a company, you don't think of the word, "reskill." You think of training and development and do people have development pathways. So we have put a lot effort on that. We want to have a person spend their entire career with our company. I've worked for the company 26, going on 27, years, you know. Many of my colleagues-- we recognize every year the 50-, 55-, and 60-year tenure employees. And 15 or 20 of them come in.

So-- but we want them to have a dynamic and be all they can be from a diversity-- be whoever they are, be successful. And so that retires reskilling and retraining throughout. I think all companies can do-- do that.

There can be different economic questions of whether they can pay the minimum starting wage that we can pay because their business model is different. But I think we can do it. And I think companies that make the money we do can do it, too.

ANDY SERWER: Now, I want to ask you about regulation. And obviously, you guys probably would say you're safer, that there's less systemic risk brought to bear on the system by you and the other big banks. Does that mean regulation worked?

BRIAN MOYNIHAN: It did. It did because there two things at work. One is regulation. And second is the stewardship of the boards of management teams and stuff to reposition the company. If you think of the two things, what were the regulations about? We need more capital. We need more liquidity. So in tough times, you'll be able to withstand market shocks. You need to bring the activities to core-- to the core activities that you need to conduct to be both a bank and a capital markets intermediary and helping people get to the market [INAUDIBLE] principal trading, the so-called Volcker Rule. And you need those types of things laid out.

All those are part of the-- whether it's Dodd-Frank or whether it's the different rules and regulations after it. And so, basically, you've seen the capital industry double. And then, you've seen stress testing around that capital, which says that-- every year you go through the stress tests. And every year, they-- basically imagine yourself in a car going 100 miles an hour where you can't touch the brake and you run in the wall. And you say, will you survive?

And what that proves is the industry has more capital than industry started with in the last financial crisis after you have ability to prepare, modify your business, and you just run to the wall without a warning, which really never happens, because you see the-- so I think the industry-- the regulation has worked.

Now, the question is-- sometimes, you have five rules that don't-- aren't consistent. Parts of Dodd-Frank, no matter-- well, you talk to the writers of it or the people who helped draft it from the staffs say, they aren't consistent. Actually, they say two different things. So the idea of getting the pendulum adjusted appropriately is critical, because each 100 basis points of capital required for Bank of America is about $15 billion of capital. We could make $150 billion of loans with it.

So if we have a 9% requirement versus 10% a requirement because of the rules, if 9 was good enough and 10 is too much, that 100 basis point we could've make $150 billion more loans to society. If-- if we-- the capital we haven't so-called SIFI buffer, we are not allowed to take a risk on. So our SIFI buffer's 2 and 1/2%. If it were 3 and 1/2%, you'd have that difference.

So the question getting those calibrations right is one the keys. And I think that's a dialogue that on goes. It doesn't mean you're not going to get rid of the concept or get rid of the concept of how much you need, just calibrating right. And so my colleague and CEOs in America and around the world are saying, hey, some of the stuff doesn't really work. Some of the stuff is doing-- having an impact on you that the markets and worlds that we don't want. So let's talk about that.

None of us are saying lower capital, lower liquidity. And so, you know, our tangible common equity ratio of 7 and 1/2% or whatever it is this quarter was 3% before the crisis. That difference is $100 billion of tangible common equity. That is a different balance sheet. Our liquidity was $100 billion. Now, it's $400 to $500 billion. We go four or five years without raising any money.

We don't do this for the regs. We do this because we believe nobody should control the destiny of Bank of America other than Bank of America. And so, whether it's rating agencies, whether it's the regulators, whether it's the equity markets, we have to be stable in all times. Because of the size we have and the scope we have, we have to make sure people think of us as a source of strength.

ANDY SERWER: And finally, Brian, what do you think your legacy is? What would you like it to be? I know your brother is a missionary, for instance. You've done some work with him. What's your take on that?

BRIAN MOYNIHAN: You know, I think-- I think a legacy I always want-- maybe people want to get rid of me, because they want to talk about [? that. ?] There's still a lot to be written, and I don't focus a lot on what we accomplished. We use the phrase in our company be called, nice start, which means, yes, take congratulations for what you've accomplished in the last 10 years, but realize it's a start to another decade-- that happens to be a decade turn-- to go dry the next 10 years.

And so that nice start is what I feel. And so I want our legacy to be that we kept improving this company, left more wood on the wood pile-- or whatever analogy you want to use-- and we did along all the dimensions. Our customer scores are the highest they've ever been. And we're driving to places of financial services [? have ?] ever been.

Our teammates score the highest in the market-- in the business, not only on general scores, but on diversity and on risk, and things like that. We're driving that. The way we pay our teammates and the fairness, the human capital impacts [INAUDIBLE] call that we have. Then, the share of returns are strong, as good as anybody's is, et cetera. And can we deliver to society?

So that's not a legacy. That's an operating principle. If we can deliver on the STGs, our environmental commitment, what we do in our human capital-- are we training? Are we reskilling our low and moderate income housing development? If we can deliver on both of those and show you can make good returns-- 15%-plus return on equity for your shareholder-- tangible common equity for shareholders and deliver $250 million of charitable giving and deliver $5 billion dollars to low and moderate income and deliver the third year of $1,000 special bonuses to teammates and deliver a special stock bonus to teammates up to $350,000 and do $1.7 billion in capital investment and put out 40 new branches and revisit 300 and become the biggest small business lender [INAUDIBLE] lender in the country.

If you can do both those things, that's pretty interesting. And that isn't a legacy, that's an operating principle.

ANDY SERWER: That sounds like you got a lot of work to do, then.

BRIAN MOYNIHAN: We do. We do. A lot of opportunity [? and a lot of work. ?]

ANDY SERWER: Brian Moynihan, CEO Bank of America, thanks very much for your time.


ANDY SERWER: You've been watching "Influencers." I'm Andy Serwer. We'll see you next time.