Bank of America CEO Brian Moynihan swings through Seattle

It was surely a massive understatement when Brian Moynihan, Bank of America's chief executive, said recently, "We've made it through a very tough time."

Indeed. Charlotte, N.C.-based Bank of America was brought to its knees by the 2008 financial crisis.

After absorbing two big, troubled companies, Countrywide Financial and Merrill Lynch, the bank survived in large part because of a $45 billion cash infusion from the federal government under the Troubled Asset Relief Program.

Bank of America repaid all its TARP money in December, a month before Moynihan took over as CEO. He's now trying to redirect the attention of employees, customers and the general public toward the future.

"We came through (the crisis) with the best franchise, a great customer base, the best portfolio of services in the business," Moynihan said in an interview during a daylong visit to Seattle earlier this month.

"So it's up to us to execute. If we do, we'll be the best financial-services company in the nation," he said.

The bank is already the largest, with more than $2.3 trillion in assets as of March 31 and 284,000 employees worldwide.

Moynihan met with several hundred of them during his visit. He also met clients and attended Microsoft's annual CEO summit.

He was unapologetic about Bank of America's size ("Because we're big, we can do more for customers, " he said), but rebuffed a description of his company as a "financial supermarket" — a reference to a much-touted corporate strategy of the 1990s and 2000s that's fallen out of favor.

"We're not a big property-and-casualty insurance player. We don't prepare taxes. There's a lot of things in financial services we don't do," Moynihan said.

"We help you pay your bills, buy your house, borrow money and invest what you're not using right now," he continued.

"That's not a supermarket, that's core activity. A supermarket is what you have when you get into things that don't relate to the core."

Moynihan was careful in describing his thoughts about several aspects of the financial-industry regulatory overhaul in Congress. (The House and Senate have passed separate bills that must be reconciled.)

He said he supported provisions for an "oversight council" to assess and respond to risks to the stability of the financial system, and for a Consumer Financial Protection Bureau within the Federal Reserve.

He called a central "clearinghouse" for derivatives, akin to a stock exchange, a "good idea," but said individually tailored derivatives shouldn't be barred outright.

And commercial banks shouldn't have to spin off their derivatives-trading operations into separate subsidiaries, as the Senate bill effectively would require them to do, Moynihan said.

"If you're a supplier to Boeing and you're importing parts from Asia, and you want to hedge currency risk, you come to us because it's embedded in your loan agreement," he said.

Derivatives and banks

"We can do (derivatives trading) at other places, and we already do it in other places," he said. "But our belief is that it should be done by banks, because that's where the (underlying) activity is."

But Moynihan questioned a provision of the Senate bill that would prohibit banks from engaging in "proprietary trading" — speculating with their own capital.

"We understand that people want banks to use their capital to support the 'real economy,' not just to make money," he said. "The problem is that it's hard to tell what's what. What I might call proprietary you might say isn't proprietary, and we could have an argument."

Bank of America has modified more than 600,000 home loans, more than any other lender and a quarter of all mortgage modifications nationwide, Moynihan said, adding, "We're qualifying as many people as we can."

But he acknowledged that for many borrowers, the only way out is through a short sale, foreclosure or voluntary repossession.

"We have been doing everything we can to help customers through these tough times," he said. "That doesn't mean we'll be able to help everyone, but we're doing as much as we can."

Tempered optimism

Moynihan was moderately optimistic about the U.S. economy.

Growth has resumed, albeit only modestly, he said, and consumers are spending more, which should ripple through to stores, wholesalers and ultimately to manufacturers.

"We're seeing that (loan) delinquencies are down and loan demand is starting to stabilize," he said.

"But the unemployment bubble is still high. We're seeing the economy recover, but it'll take some time."

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com