* Businesses trim spending amid uncertainty
* CEO Moynihan remains optimistic about outcome
* BofA plans to continue shedding mortgage assets
By Rick Rothacker
Nov 13 Fiscal brinkmanship in Washington is
already affecting the U.S. economy as worried businesses invest
less in equipment, Bank of America Corp Chief Executive
Brian Moynihan said.
U.S. lawmakers return to the capital Tuesday with a
seven-week deadline to agree on averting the so-called fiscal
cliff - scheduled tax hikes and budget cuts, set to take effect
in January, which threaten to tip the nation into another
recession. [ID: nL1E8MD0B9]
"That uncertainty continues to hold back the recovery,"
Moynihan said Tuesday at an investor conference in New York.
The bank's clients need more clarity before they make
investments, he said.
Moynihan and chief executives of other major financial
services companies sent a letter last month to President Barack
Obama and members of Congress urging them to find a bipartisan
The parties involved know a resolution is needed in the
first quarter of next year, Moynihan said, adding he remained
optimistic about the outcome.
Moynihan, the opening speaker at a conference hosted by his
bank, spent most of his presentation highlighting his efforts to
streamline Bank of America, which required two bailouts during
the financial crisis.
In his nearly three years as CEO, the bank has shed more
than $60 billion in non-core assets and businesses, generating
more $12 billion in Tier 1 common capital.
In its continued downsizing, the bank plans to reduce its
mortgage servicing portfolio to about 6 million loans, down from
about 8 million now and 12 million at its peak, Moynihan said.
Bank of America has been scaling back its role in the
mortgage business after incurring massive losses on its
disastrous 2008 Countrywide Financial acquisition.
Servicing mortgage loans - collecting payments and assisting
delinquent homeowners - has grown more expensive during the
housing bust and requires more capital under new international
"We continue to look at transactions," Moynihan said. "We
have been selling servicing in relatively sizable chunks to the
The bank's shares were up 0.4 percent at $9.43 in morning