Brian Moynihan, Bank of America CEO, spoke with Bloomberg Television’s David Westin today about the risks facing the banking industry and the state of the global economy.

Moynihan on U.S. consumer spending: “October is probably one of the strongest months this year relative to October of last year…It’s a strong economy…Unemployment levels are down, and wage growth is picking up. That’s all good. Now the question is, what can derail that. And that’s what we have to pay attention to.”

On cyber attacks and how often Bank of America experiences attempts to break in to the system, Moynihan said: “You should assume that we get hit on occasion, and more than rarely. And what we do is defend it well.”

Brian Moynihan

BofA CEO Moynihan: Consumer Spending Strong in October

DAVID WESTIN: So we are here with Brian Moynihan, Chairman and CEO of Bank of America. Thank you for joining us, Brian.

BRIAN MOYNIHAN: It’s great to be here, David.

WESTIN: So we’re here for a panel that you graciously did with Michael Chertoff, the former head of Homeland Security, for the Bloomberg Year Ahead Conference. We just were talking about risk, and particularly cyber risk, and how much that is on your mind at Bank of America. Give us a snapshot of what you do to manage that risk.

MOYNIHAN: Well it’s always hard with Secretary Chertoff to stay ahead of him, the good news, we use his firm to help us. But hire good people. We are willing to spend the money it takes because it’s our customers and our trust at risk.

And then we have to have good governance processes with how we behave internally and how we manage the risk. And so I think we’ve, Cathy Bessant and the team have done a great job of staying ahead of it, but with — you can never sanguine here. You always have to be moving forward and think about what could happen next.

WESTIN: Yes. One of the points you made is it’s not just a mechanical problem. This is not just machines and digits. It’s also people.

MOYNIHAN: And it’s behaviors. It’s people. It’s people using devices, how people go out to the internet and to out in the world. It’s what we call personal hygiene. I mean it’s like nothing else. And we have a security card to get into the buildings. Then you have to have great security around people use the internet.

And so all that has to work, and you have to have a set of rational policies, but you have to be very disciplined about it. And then you have to be willing to invest the money and make it work so that on the rare occasion when it doesn’t work you can fall back and get in shape.

WESTIN: Now there was indictment announced just today, or unsealed, really, by Preet Bharara on the southern district that fortunately did not involve your bank, but did involve another bank and some other financial institutions, but it’s not for lack of trying that people are trying to get into Bank of America systems. How often do you experience some attempts to break into you?

MOYNIHAN: We don’t talk about those because we just don’t. We — but you should assume that we get hit on occasion, and more than rarely. And what we do is defend it well. And in terms of the indictment and things, I think one of the things I see going forward, David, is the cooperation between institutions and government has to just to continue to move forward so we can find the people who are not good people, and take care of it.

WESTIN: Is that particularly the United States government, or foreign governments as well?

MOYNIHAN: All over the world. I mean this is a worldwide problem because it doesn’t know boundaries. You can find a place to get to people from anyplace. And so, like anything else, it’s easy to — like anything, like different than physical space, you can usher the resources with a relatively few number of people, and a relatively few number of dollars and you can do it from anywhere. Hence that means that the amount of cooperation and work that has to go on is far different than the traditional we think about war or terrorism, which is less — is more physical, and more people, and it takes big money and it takes ships and things like that. This is — can be mounted fairly quickly.

WESTIN: To what extent do you and other financial institutions share some experiences and just tell them what you’ve learned to try to develop your own defenses?

MOYNIHAN: Well through our trade groups we have a financial services round table. Through the other trade groups we have forums where we compare notes. And so our chief technology officer, and then more importantly even the people who work on this specifically have industrywide groups that are sponsored by the industry trade groups, but also the government calls us together periodically to make sure that we — that we know what they know that they can share so that we’re ahead of them. And so there’s a pretty good amount of cooperation.

WESTIN: So let’s move to what I hope is opportunity. Let’s stay with the U.S. economy for a minute because Bank of America is in a particular position to have an insight into the U.S. economy, given your retail operation and you’re dealing with so many customers throughout the country. Where do you think we are in the economy right now?

MOYNIHAN: Well it’s been very interesting to watch this September to October term, because if you went July, August, September in the third quarter, what happened is July and August were pretty strong on consumer spending. And it slowed just a hair, largely because of what was going on in the world. It picked right back up in October.

So October is probably one of the strongest months this year relative to October of last year. The benefit from low gas prices, people are spending that money, aggregate spending probably near five percent, not taking into account the benefit from gas prices, four percent without that. So it’s a strong economy. And as we see that translate in that consistent move by the consumer to spend, and the unemployment levels are down and the wage growth is picking up, that’s all good. Now the question is what to (INAUDIBLE) that. And that’s what we have to pay attention to.

WESTIN: And what about construction? I know you had a fair amount of participation in financing construction. How has construction been, because that’s a driver really.

MOYNIHAN: Well housing starts are now — they’ve bounced around a little here, and sometimes disappointed people and sometimes encouraged them, but the reality is they are up year-over-year about 10 to 15 percent, and that’s what’s projected in the year end. So housing is very constructive, and the multifamily housing is still very strong.

And we expect that. That’s also creating job development because construction projects can’t be imported. In other words, you have to build the house locally. You may be able to bring in some

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