Bank of America (NYSE: BAC) Chief Executive “Concerned” About Glass-Steagall Reinstatement

As part of muted remarks that highlighted his first day as Bank of America Corp’s (BAC) new chief executive, Brian Moynihan said he is “concerned with the view that somehow the integration of capital markets and commercial banking is a flawed structure for companies in our industry. It is not.”

The Wall Street Journal summarized his comments which touched on the growing campaign to add additional, or in the case of Glass-Steagall, to reinstate regulations on financial giants.

The move to reinstate the Glass-Steagall Act received bipartisan support by Senators John McCain (R., Ariz.) and Maria Cantwell (D., Wash) in December.

The act would prohibit traditional banks from underwriting securities like new stock issues. Such a regulation would clearly be a blow to Bank of America as it seeks to digest the losses they incurred from their decision to purchase Merrill Lynch & Co. in late 2008.

That decision, which Moynihan helped execute, helped push Bank of America into the Troubled Asset Resolution Program (TARP), resulting in a taxpayer-funded $45 billion bailout.

Heading off a reinstatement of Glass-Steagall is one of the two priorities for Moynihan as his tenure begins.

The bank repaid the $45 billion in taxpayer support last month.

“We sincerely appreciate taxpayers making these funds available at a time of crisis,” Mr. Moynihan said in his remarks. “But the key lesson here is ‘never again.’ We can never again get our company or our industry in this position.”

In other remarks, Moynihan said he expects the beginning of his tenure running the Charlotte, N.C., bank to be marked by a “long, slow (economic) recovery” that will include a high unemployment rate.

“We continue to be worried about the fragility of the economy,” Mr. Moynihan said Monday in prepared remarks for delivery to the North Carolina Bankers Association. “We still have a way to go before we can pop the cork.”

He said the bank expects U.S. gross domestic product to grow more than 3% this year.

The bank’s new chief planned to thank his predecessor, Ken Lewis. Mr. Lewis faced withering scrutiny and investigations over Bank of America’s handling of the merger, and he later resigned. Bank of America’s board of directors appointed Mr. Moynihan, an insider, to succeed Mr. Lewis after the bank was unable to woo outside candidates.