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

Posted by Larry Doyle on June 17, 2011 3:41 PM |

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?

Navigate accordingly.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.


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