Bloomberg’s Jonathan Weil Believes BofA and Citi Need More Capital

Earlier this week, I inquired of BofA Shareholders, ‘How Long Can You Tread Water?’ and asked whether BofA may need more capital.

BofA’s CEO Brian Moynihan maintains that the institution does not. He stated as much earlier this month in a commentary in the Charlotte Observer,

Bank of America Corp. chief executive Brian Moynihan insisted Wednesday that his company won’t have to raise additional capital as it absorbs mortgage-related losses.

Banks need to keep sufficient capital on hand as a cushion against unexpected losses. In the wake of the financial crisis, new global standards will require them to hold even more over time.

Moynihan, who has been CEO for 18 months, has repeatedly said the Charlotte bank is improving its capital ratios by accumulating earnings and shedding riskier assets, but he faced another round of questions about the issue Wednesday at an investor conference in New York.

“We don’t see any reason to raise capital at all,” Moynihan responded.

Highly regarded Bloomberg columnist and Sense on Cents Hall of Fame honoree Jonathan Weil believes otherwise. Let’s take a listen as Weil emphatically takes the opposing view and states that both BofA and Citigroup need more capital.

Haven’t we seen this movie before?

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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