Bank of America CEO predicts soft landing for U.S. economy, warns of Basel III impact

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Bank of America CEO predicts soft landing for U.S. economy, warns of Basel III impact
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Bank of America (NYSE: BAC ) CEO Brian Moynihan expressed confidence on Thursday about the U.S. economy achieving a soft landing, attributing this to continued strength in consumer spending. The bank's strategists believe that a recession is not on the horizon, with Moynihan stating at a luncheon hosted by the Economic Club of New York that robust consumer spending has reversed recession calls.

Moynihan also pointed out that customer savings and commercial customers' credit quality at Bank of America remain strong. He noted that the Federal Reserve has been successful in its fight against inflation, but cautioned that there is now an equal and opposite challenge - ensuring they do not overreach in tightening monetary policy.

On the subject of the proposed Basel III endgame, which suggests higher capital requirements for U.S. banks, Moynihan voiced concerns similar to those of his counterparts. He warned that these rules could potentially make U.S. banks less competitive globally and said he had never seen so much controversy over capital rules.

These concerns were previously echoed by Bank of America CFO Alastair Borthwick, who warned that the proposed rules might limit bank lending as risk-weighted assets could be double counted in some instances. This criticism of the proposal is shared by other financial leaders, including JPMorgan (NYSE: JPM ) CEO Jamie Dimon and Goldman Sachs (NYSE: GS ) CEO David Solomon, as well as a few Fed governors, all of whom have raised concerns about potential risks to bank lending.

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