Bank of America CEO Brian Moynihan gave a talk in Charlotte Wednesday night about topics you rarely get to hear bankers discuss openly.
Speaking at Christ Church Charlotte for a forum organized by the church, Moynihan fielded questions from the Rev. Chip Edens on prayer, greed, life-work balance and other subjects the CEO of the second-largest U.S. bank by assets doesn’t usually talk about publicly.
Moynihan and Edens spent about an hour discussing those and other subjects in a room filled with an estimated 500 members of the public. Here are some highlights from their conversation:
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On his nickname
Edens asked Moynihan about his nickname, to which Moynihan quipped he has “more than one, (which) is the problem.”
The specific nickname Edens was referring to is “Brian the lion.”
Moynihan said he was given that nickname as a child by his father.
“That kind of stuck with me through my life,” said Moynihan, adding that he keeps a lion sculpture on his desk.
On growing up Catholic
Moynihan, 55, said he was one of eight children raised in a Catholic family. His father was a chemist who had been relocated for work to the town of Marietta, Ohio. His said his mother went to college for a year and then got married at 18.
“It was a household of just a lot of activity,” he said. “You learn from each other. You did some stupid stuff, because ... the possibility of error when you have that many kids goes up.”
When he was young, he worked in the church, where he mowed the lawn, tended gardens, answered phones and cleaned the rectory.
“That gave me an appreciation for the priesthood,” he said.
Moynihan noted that priests are always on the job.
“You can’t give up the title just because you happen to be walking around, because something could happen and people need you,” he said. “On the other hand, your family structure’s just much different because you don’t have a wife and children.”
On his early work experience
Edens asked Moynihan if he ever worked odd jobs growing up.
“Always,” Moynihan said.
One of those jobs was dishwasher at Bonanza steakhouse.
Moynihan also said that when he was younger he helped one of his brothers, now a landscape architect in St. Louis, with lawn work.
Moynihan, jokingly, said that brother used him “as his slave labor.”
On football and rugby
Moynihan played football in high school and then at Rhode Island’s Brown University, but he later switched to rugby while at Brown.
Rugby is “continuous play and everyone touches the ball and plays all positions,” Moynihan said. “… The element of teamwork is so much more precise than football is.”
On the purpose of banking
Edens recited for Moynihan something that Lloyd Blankfein, the CEO of Goldman Sachs, once said:
“We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle.”
“Do you agree with that?” Edens asked Moynihan.
“Yeah,” Moynihan said. “We have a duty as an institution and an industry to transmit the real economy from here to there.”
For example, Moynihan said, banks give consumers access to credit and help companies raise capital.
“The danger in banking and where it got messed up … is we lost the purpose,” Moynihan said. “… People said, ‘We’ll just make money.’ It’s always about customers.”
The purpose of banking, Moynihan said, is to “help the real economy.”
“That’s a good thing, because it’s jobs, it’s employment, it’s people’s lives, it’s community development,” Moynihan said. “But if we went out and said, ‘I’m just going to try and make money for money’s sake,’ that’s when we get a kilterless society.”
Edens then switched the subject to greed. “Is greed good?” Edens asked the CEO.
Moynihan responded by talking about when he was asked to take over corporate and investment banking at Bank of America.
“We looked at things called CDOs,” Moynihan said, referring to a product called collateralized debt obligations, a complex financial instrument.
“I said, ‘Who is the customer?’ And nobody could really answer that question clearly. And once you did that then all the risk became piled up on our balance sheet,” Moynihan said.
“We bottled up a lot of risk, thank God not as much as other people had,” he said.
The question that banks have to ask themselves, Moynihan said: “Are you doing things that add value to your customer base, which inherently adds value to society?”
“In banking, our job is to move the risk through the system and manage it well,” he said.
Banks deal with customers who sometimes fall on hard times and have trouble repaying loans, Edens told Moynihan. Edens then asked the CEO how he thinks about the concepts of mercy and forgiveness through the lens of a businessman.
Moynihan noted the modifications the bank has made to mortgages to make them more affordable for borrowers since the housing downturn. But the problem with forgiving all loans that have gone into default is that would “raise the costs to the rest of society,” he said. He said the bank works with customers struggling to make payments to find solutions.
Bank of America has laid off tens of thousands of employees under Moynihan, many in its unit that works with borrowers who have fallen behind on their home loans. The bank has let go of those workers as the number of loans in default has declined over the years – and as the bank has sought to slash the high costs in that unit.
When Edens asked Moynihan about the experience of having to lay off people over the course of his career, the CEO described it as “the single hardest thing to know that you are doing, that you are affecting people’s lives.”
“In your mind, the reconciliation is, ‘Wait a second. If I don’t do this, I’m not going to be running this company,’” because someone ultimately has to make that hard decision, Moynihan said.
“You’ve got to do it the right way,” Moynihan said. That includes being fair, providing job fairs and “strong” severance packages and finding other positions within the company for the laid-off employees, he said.
“We try to do everything we can to mitigate the actual human impact.”
On work-life balance
Moynihan, who lives in Boston but has a main office in Charlotte, said he travels outside the U.S. at least once a quarter. He said he’s back home in Boston on the weekends and at least one night a week.
“I don’t believe in this ‘quality time,’ work-life balance. You’ve just got to do what feels right,” Moynihan said.
“You’ll never get this right,” he said. “It’s very difficult.”
Toward the end of the talk, Edens asked Moynihan what he prays for: Himself? Family? Others?
Moynihan said one thing he prays for is “teenage drivers getting home safe.”
He also said: “You start with family.”
“You want God to help you have the courage and the strength to keep going.”