BofA to Pay Up to $17B Fine for Mortgage Settlement

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Aug. 7 (Bloomberg) -- Former Goldman Sachs Group Vice Chairman Robert Kaplan and Bloomberg’s Brendan Greeley discuss Bank of America to pay up to seventeen billion dollars in fines for mortgage settlement. They speak with Tom Keene and Scarlet Fu on “Bloomberg Surveillance.” (Source: Bloomberg)


We bring in our guest host, robert kaplan of harvard business school.

Brian moynihan leads the way.

They have been stubborn and not getting into the $17 billion number.

It seems like they are all of a sudden.

Is he an adequate leader for this kind of situation?

Yes, he has a good background with his legal background for this situation.

They want to move to put this behind them.

Also, they have so many government entities who are regulating them, i think you want to be on good terms with the government.

You want to get these things behind them.

They are well preserved.

You will see the stock react positively to this.

And so, i think they want to do what other banks have done, keep moving forward and get this behind them.

Keep moving forward.

A lot of people questioned once this is done, the focus goes back to operationally what the bank can do.

In this kind of environment, with the legal overhang and capital requirements that are now being put upon by regulators, where is this growth prospect?

What can brian moynihan do to change the trajectory of think of america?

They have been focused on operating improvements.

Back to europe, we have a global age in the western world, a massive deleveraging, particularly in europe.

It creates sluggishness for gnp growth.

He is dealing with low interest rates, the yield curve is fairly flat.

The net interest margin, therefore, in the western world is more challenged.

They are trying to work through that.

You say they are adequately reserved.

Bank of america, j.p. morgan, citigroup.

Number of days compared to operating income.

J.p. morgan paid $13 lien, citigroup paid seven dollars lien.

Shows scope and scale.

I'm curious about ongoing cultural change in largest banks.

Yesterday we saw the fdic and the fed say your plans for the wind down are not sufficient.

You are going to have to make some changes.

This was real, aggressive regulation.

No, you cannot just say something.

You have got to fix it.

That is more about a cultural change with the regulators than the bank.

The regulators are sending a message, take us seriously or we will push back.

Are bank going to have to change?

They've been doing it.

If you sit in bank boardrooms when the fed comes in, the tone is very different.

The banks are working very hard to do their capital adequacy, the living wills, the resolution authority.

They are dramatically working to improve everything they do.

The regulars are being very tough.

Do you think this is moving down the chain?

They are saying within the company we have to make this change?


You look at how many compliance people jpmorgan has hired.

Ucf seen -- you seen the headlines, banks are taking this seriously.

This is something we will continue to discuss as we wait for bofa to make an announcement.

Bloomberg is reporting now anywhere between $16 to $17 billion.

This text has been automatically generated. It may not be 100% accurate.


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