By Steven K. Beckner

WASHINGTON (MNI) – Bank of America chief executive Brian Moynihan
cast doubt Friday on the efficacy of renewed quantitative easing by the
Federal Reserve, saying that interest rates are already “very low,” with
growth supportive and that the main impediment to faster economic growth
is “uncertainty.”

Moynihan, speaking to the National Press Club, said that a lack of
money in the system is not the problem.

He echoed a number of Fed officials in citing uncertainty about
regulation and product demand as a key factor keeping firms from hiring
in prepared remarks.

Asked by Market News International after his speech whether, in
view of that uncertainty, he thinks it would be worthwhile for the Fed
to increase asset purchases to reduce already low interest rates, the
BOA President and CEO, initially replied, “That’s a policy decision, and
my job is to react to news, not to make news.”

However, Moynihan went on to observe that “the interest rate
structure is the lowest it’s ever been.”

“The rate structure is very low and very supportive of people
making commitments,” he continuing, adding that there is not a lack of
“availability of money and availability of cash.”

Moynihan said the reluctance of firms to borrow to finance
expansion and to increase hiring “comes down to uncertainty.” He said
firms are asking “is there going to be demand for my products?” And “is
regulation going to be certain enough?”

His comments come amid mounting speculation that the Fed’s
policymaking Federal Open Market Committee will authorize a resumption
of quantitative easing as early as its Nov. 2-3 meeting.

MNI also asked whether his bank can increase lending, as various
government officials have demanded, while also meeting higher capital
requirements and other new regulatory standards, Moynihan replied, “We
have tremendous capacity on our balance sheet to fund loans.”

Higher capital requirements “will not impact our ability to lend,”
he added.

“The reality is that for companies that have a track record and
want to borrow $100,000 and up the approval rates are higher than they
have ever been.”

He said large firms with lines of credit at “the lowest rates
ever”‘ only have to ask to be able to borrow.

But again, he said, firms are reluctant to borrow because of
“uncertainty.”

He acknowledged that it is harder for smaller firms to get credit.

Moynihan said his bank — the largest in the U.S. by assets — is
“earning half of what we should earn” and advised investors, “I wouldn’t
root against financial sector profits. They will snap back very fast.”

** Market News International Washington Bureau: 202-371-2121 **

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