Bank of America CEO Brian Moynihan spoke with Fox Business Network’s (FBN) Maria Bartiromo regarding the European Central Bank’s bond-buying program, how it will help the United States Federal Reserve as well as Bank of America. On the European Central Bank (ECB) bond-buying program Moynihan said, “I think it’s a good thing…anything to help with growth in Europe is a good thing.” Regarding expectations that the Federal Reserve will raise rates because of the ECB news, Moynihan said, “the market does and we do, and it’s largely because you see the economy strengthening.” He goes on to say, “The fact that they raise rates is not as important as the fact is they are raising rates because these other things are happening.”
Bank Of America CEO on the ECB bond-buying program:
“Well I think the last couple days it’s gotten pretty concrete and it seems to meet the commitments that are out there and I think anything to help with growth in Europe is a good thing and I think Mr. Draghi and the ECB have decided it’s time to push a little bit and I think it’s a good thing. I think it seems to be what the market expected in this kind of range and I think its continuous nature that’s going to happen over a long period of time I think provides a back born or back basis in which I think the market can assess it.”
Bank Of America CEO on if Moynihan expects the Federal Reserve to raise rates:
“The market does and we do and it’s largely because you see the economy strengthening. Our estimates for 2015 are around 3 ½ percent for the US economy GDP growth. The fact that they raise rates is not as important as the fact is they are raising rates because these other things are happening.”
Bank Of America CEO on why raising rates is important for Bank of America:
“It’s good for us and it’s good for us for a couple different reasons. First, it’s good for us because it is an indication the economy is growing and when the economy grows, Bank of America will fare well with 80 percent of revenues in the United States. The second thing why it’s good for us is more on a technical side which is we gather deposits to make loans and the difference between those is what is called net interest margin, and when the rate structure is as low as it is we have free deposits, checking account deposits that we can’t count below zero and so as rates raise and become more valuable we can provide even lower costs of relative funding and that provides for profit.”
