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Bank of America: Brexit Britain should expect disruption

Sky News logo Sky News 23/01/2019 Adam Parsons, business correspondent, in Davos
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The head of one of the world's biggest banks has told Sky News that Britain should prepare for disruption after Brexit.

Brian Moynihan, chief executive of Bank of America, also said the UK needed to be much clearer about its future ambitions and to think more deeply about how it positions itself in the future shape of the world economy.

He confirmed that he had overseen spending of around $400m on preparing the bank for Brexit, setting up operations on mainland Europe and moving some staff out of London.

He said: "We're preparing as if Brexit happens at the end of March with no deal because you have to prepare for that.

Brian Moynihan wearing a suit and tie: Brian Moynihan said his bank has overseen spending of around $400m on preparing for Brexit © Other Brian Moynihan said his bank has overseen spending of around $400m on preparing for Brexit

"But we hope that there's a series of decisions made over the next couple of weeks that mean that they work out something more orderly than just going over the edge.

"The reality is that, right now, we are spending a lot of money, and putting in a lot of effort and a lot of time with our clients to get them ready."

He said there was "sure" to be disruption, adding: "I think disorder is never the friend of ongoing economies.

"And certainly when you add disorder, and when people are not sure how things are going to operate, those are all not good.

Gallery: Facts to know about Brexit (Picture Services)

A handout video-grabbed still image from a video made available by UK parliament's parliamentary recording unit shows Britain's Prime Minister Theresa May speaking prior to the Meaningful Vote at the parliament late 15 January 2018, London, United Kingdom, the crucial vote on whether to support or reject Theresa May's deal of UK leaving the European Union. The legally-binding Withdrawal Agreement sets up a 'transition or implementation period' that runs until the end of 2020 after Brexit. The United Kingdom, that on 01 January 1973 joined EEC or European Communities, predecessor of European Union, has been a EU member state for 46 years.

"Over a short period of time, it'll be a little hard to figure out how to get things done and that'll cause disruption.

"We have extra liquidity, we have extra people ready to work if we don't know what the volumes will be and what happens at the trading venues, but I think that'll be a short time and then you'll get back to it.

"Then, the fundamental question will be how the country will compete in a world domain for talent and people and companies that can employ people and help their success."

Mr Moynihan's company employs more than 200,000 people around the world, several thousand of whom work in the UK.

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It has assets of around $2.3tn, making it the second biggest bank in the United States, just behind JP Morgan.

He believes that, post-Brexit, Britain will need to "decide what it wants to be" because "it'll be very different to be competing when you're the size of the UK rather than the size of the EU, and that'll be interesting thing for people to work out over time".

Mr Moynihan went on: "You have different options, a different currency and you're going to have a different set of rules.

"The UK will not be attached to Europe, and that'll mean a different set of visions, and having to work with people differently."

LONDON, ENGLAND - JANUARY 23: A woman walks past EU and Union flags outside the Houses of Parliament on January 23, 2019 in London, England. There are reports that MPs are proposing alternative plans to the Prime Ministers existing Brexit deal, including a possible extension to the exit date, currently scheduled for 29 March. (Photo by Dan Kitwood/Getty Images) © Getty LONDON, ENGLAND - JANUARY 23: A woman walks past EU and Union flags outside the Houses of Parliament on January 23, 2019 in London, England. There are reports that MPs are proposing alternative plans to the Prime Ministers existing Brexit deal, including a possible extension to the exit date, currently scheduled for 29 March. (Photo by Dan Kitwood/Getty Images)

More than one in ten American deposit accounts are held with Bank of America.

He told Sky News that he favoured loosening the tight regulations that were placed on banks in the United States in the wake of the financial crisis a decade ago, saying that he presently had "$100bn sitting there that we would rather use to give out loans into the economy".

My Moynihan explained: "It could add extra liquidity and capability to the economy that is not there today because the money is actually sitting completely idle.

"It can't be put to use, we can't take risk, can't make a loan with it.

LONDON, ENGLAND - JANUARY 23: Anti Brexit placards outside the Houses o Parliament on January 23, 2019 in London, England. There are reports that MPs are proposing alternative plans to the Prime Ministers existing Brexit deal, including a possible extension to the exit date, currently scheduled for 29 March. (Photo by Dan Kitwood/Getty Images) © Getty LONDON, ENGLAND - JANUARY 23: Anti Brexit placards outside the Houses o Parliament on January 23, 2019 in London, England. There are reports that MPs are proposing alternative plans to the Prime Ministers existing Brexit deal, including a possible extension to the exit date, currently scheduled for 29 March. (Photo by Dan Kitwood/Getty Images)

"I think if we put it back in the system it would do good things.

"We have tremendous liquidity, tremendous capital, we do hundreds of billions of new loan every quarter, mortgage loans, credit card loans, small business loans.

"This isn't a question of being able to serve the customers, it's a question of being able to serve them even better."

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