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'Fiscal Cliff' Repercussions Could Stretch in 2014: BofA CEO

Tuesday, 4 Dec 2012 | 7:10 AM ET
Speaker of the House John Boehner and President Barack Obama.
Getty Images
Speaker of the House John Boehner and President Barack Obama.

As President Barack Obama and Republican leaders race to avoid the "fiscal cliff," Bank of America CEO Brian Moynihan said the uncertainty has already hurt business spending for 2013 and said the failure to reach a resolution by year-end presents not only a near-term recession risk, but also the possibility of longer negative effects.

"I'm more concerned about business behavior slowing down than I am about consumer behavior," Moynihan told "Squawk Box" in a CNBC exclusive interview. "I think we're in danger if this thing strings out into 2013 that you could start to have problems of what 2014 would look like."

Fiscal Cliff Concerns Hurt Business Spending: BofA CEO
In an exclusive interview with "Squawk Box's" Becky Quick, Bank of America CEO Brian Moynihan talks about his concerns and solutions to the U.S. spending and debt crisis.

Moynihan is a member of the CEO Council of the non-partisan Fix the Debt campaign along with dozens of other business leaders including JPMorgan Chase CEO Jamie Dimon and Goldman Sachs CEO Lloyd Blankfein. They've been calling for Washington to Rise Above politics and reach a comprehensive agreement to stabilize and reduce the federal debt as a share of the economy.

Failure to act poses a "near-term recession impact," according to the Bank of America chief. "[Stock market levels] are in decent shape and consumers and the economy (have) been growing. The question was will everything going on cause them to slow down?"

Yesterday, House Republicans countered the president's earlier proposal to avoid the mandatory tax increases and spending cuts of the fiscal cliff with a plan of their own that includes $800 billion in increased tax revenue. That's about half of what the White House wants and it was promptly rejected.

BofA CEO Says Mortgage Business Is Doing Better
Brian Moynihan, Bank of America CEO, talks to "Squawk Box's" Becky Quick in an exclusive interview about interest rates and the Fed's efforts to keep them low for a while.

Interest Rates and the Fed

"I'd rather have higher interest rates because it means the economy's growing. If the economy's growing, we're gonna do better as an industry," said Moynihan who, like all banking CEOs, would rather have rates higher because that makes it easier to make money.

But Moynihan did acknowledge that the Federal Reserve is trying to help the economy with its easy money policies that are keeping interest rates low for the foreseeable future.

Despite the low mortgage rates, Moynihan said, "We'll do more mortgage originations this quarter than we did last quarter, than we did the quarter before, than we did the quarter before."

BofA Seeks to Raise Revenue by Expanding Relationships, Not Fees
Bank of America CEO Brian Moynihan explains the business behind bank fees and how customers can avoid some of them in an exclusive interview with "Squawk Box's" Becky Quick.

Banking Fees

Bank of America is seeking to raise revenue by expanding relationships with its banking customers rather than increasing fees.

"What we're doing is everything we can to drive relationship banking," said Moynihan. "The more relationship people have with us, they'll be able to avoid fees and charges because it's a trade of value and that's what we've been after."

Moynihan would not comment on whether any fees would be going up or the timing related to any such move.

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