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CNBC EXCLUSIVE: CNBC TRANSCRIPT: BANK OF AMERICA CEO BRIAN MOYNIHAN SPEAKS WITH CNBC’s WILFRED FROST TODAY

WHEN: Today, Thursday, October 26, 2017

WHERE: CNBC's "Fast Money Halftime Report"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Bank of America CEO Brian Moynihan and CNBC's Wilfred Frost on CNBC's "Fast Money Halftime Report" (M-F 12PM-1PM) today, Thursday, October 26th. Following is a link to video from the interview on CNBC.com: https://www.cnbc.com/video/2017/10/26/bank-of-america-ceo-brian-moynihan-on-brexit-theres-no-upside-here.html.

All references must be sourced to CNBC.

SCOTT WAPNER: ALL RIGHT. BANK OF AMERICA IS THE TOP PERFORMING FINANCIAL STOCK IN THE PAST MONTH, UP 12%. OUR WILFRED FROST IS IN NEW YORK CITY NOW WITH AN EXCLUSIVE INTERVIEW WITH BANK OF AMERICA CHAIRMAN AND CEO BRIAN MOYNIHAN. IT IS HIS FIRST INTERVIEW SINCE THE BANK REPORTED THIRD-QUARTER EARNINGS. WILF.

WILFRED FROST: HEY SCOTT. THANKS VERY MUCH. AS YOU SAID, I'M HERE WITH BRIAN MOYNIHAN. BRIAN, VERY GOOD MORNING – AFTERNOON TO YOU. THANKS FOR JOINING US.

BRIAN MOYNIHAN: THANK YOU FOR BEING HERE. THANK YOU FOR COMING TO OUR HOUSE.AND I SEE YOU'VE GOT YOUR BRANDING UP.

FROST: WE DID. WE MANAGED TO SQUEEZE ONE SIGN IN ALONGSIDE ABOUT A HUNDRED OF YOURS. SO I HOPE YOU DON'T MIND ABOUT THAT. LET'S TALK ABOUT MARKETS IN GENERAL FIRST OF ALL, BECAUSE THEY CONTINUE THEIR EXTRAORDINARY RISE OF LATE. AND WHEN YOU CONSIDER ALSO THAT CENTRAL BANKS ARE CHANGING DIRECTION, THE ECB THE LATEST TO DO THAT TODAY OF COURSE, AND ALSO THAT HUGE FLOW OF MONEY THAT'S GONE INTO PASSIVE PRODUCTS. DOES IT CONCERN YOU THAT WE MIGHT HAVE A PULLBACK DUE THAT COULD BE BIGGER AND COME SOONER THAN PERHAPS SOME ARE EXPECTING?

MOYNIHAN: WELL, I THINK YOU START WITH THE CENTRAL BANK UNWIND, NEVER BEEN DONE. BUT ON THE OTHER HAND, I THINK NO CENTRAL BANK'S GONNA UNWIND AND HURT THE ECONOMY OR HURT THE UNDERLYING ECONOMY BECAUSE THAT'S THEIR ROLE IN LIFE IS TO MAKE SURE THERE IS GROWTH AND THINGS LIKE THAT. SO I THINK IT WILL BE – UNTIL IT'S PASSED US, IT WILL ALWAYS BE A QUESTION OF WILL THEY DO IT – WILL IT HAPPEN RIGHT, WILL THE MARKETS RECEIVE IT RIGHT, WILL THE STUFF LAND IN THE RIGHT PLACES AND I THINK THAT'S A CONCERN. I THINK IT'S ONE EVERYBODY IS THINKING ABOUT AND FOREWARNED ABOUT. AND IN TERMS OF THE BROADER MARKET AND THE STRUCTURE OF PASSIVES AND ACTIVES, AND YOU KNOW, THERE'S A LOT OF FLOWS IN BUT THERE'S STILL UNDERLYING SHARES HELD BY A LOT OF DIFFERENT TYPES OF PEOPLE. SO I THINK WHILE AT THE EDGES, EVERYBODY GETS VERY CONCERNED ABOUT THIS AND WE RIGHTFULLY ARE – WE THINK ABOUT IT ALL THE TIME THE REALITY IS EVERYBODY HAS LOOKED AT THE LAST FLOW IN AS OPPOSED TO THINKING ABOUT THE BROAD UNDERLYING HOLDINGS SO WELL SEE IT PLAY OUT. THERE ARE POSSIBLE OUTCOMES WITH MORE VOLATILITY IN THE SHORT TERM. RIGHT NOW THERE'S BEEN SO LITTLE, IT MIGHT EVEN HELP A LITTLE BIT FROM TRADING REVENUE.

FROST: IT COULD HELP THE REVENUES, EXACTLY. BUT IN TERMS OF THE RECORD STOCK MARKET CLOSES THAT WE'VE CONTINUED TO SEE RECENTLY, IS THE PRESIDENT RIGHT TO TAKE CREDIT FOR THOSE? HAS HE HELPED DELIVER THEM?

MOYNIHAN: WELL, I THINK MY 200,000 TEAMMATES WOULD THINK THEY HAVE SOMETHING TO DO WITH THE FACT WE DELIVERED $500 BILLION IN EARNINGS AND THINGS. AND I THINK PEOPLE AT EVERY OTHER COMPANY THINK THAT. BUT AT THE END OF THE DAY THE ENVIRONMENT OF A PRO BUSINESS ENVIRONMENT WHERE POTENTIALLY TAX REFORM BUT MORE IMPORTANTLY REGULATORY REBALANCING, NOT TAKING IT AWAY BUT KINDA COMING IN THE MIDDLE, THOSEARE GOOD IDEAS FOR BUSINESS. AND THEN YOU FORGET THAT THE ECONOMY IS FUNDAMENTALLY GROWING AT 2 PLUS PERCENT AND THAT COMPOUNDS AND COMPOUNDS AND COMPOUNDS AND THAT COMPOUNDS INTO EARNINGS. SO I DON'T TAKE CREDIT WHEN THINGS GO RIGHT OR WRONG. I THINK EVERYBODY SHOULD REALIZE IT'S A MULTI-FACETTED QUESTION. BUT ON THE OTHER HAND THE ENVIRONMENT YOU CREATE, JUST LIKE I HOPEFULLY CREATE FOR OUR TEAMMATES TO GROW, ARE RESPONSIBLE, GO THROUGH THE SAME ENVIRONMENT YOU'RE WORKING IN, IT'S MORE PRO BUSINESS AND PEOPLE LIKE THAT.

FROST: WHEN YOU TALK ABOUT LOAN GROWTH, YEAR TO DATE FOR THE INDUSTRY, IT'S ESSENTIALLY BEEN FLAT IT'S ONLY UP 1% AND IN FACT, SLOW CORPORATE LOAN GROWTH HAS BEEN A BIG PART OF THAT. IF WE DID SEE A TAX REFORM BILL, DO YOU THINK THERE WOULD BE AN IMMEDIATE IMPACT ON METRICS LIKE THAT AND THE ECONOMY STRAIGHTAWAY?

MOYNIHAN: I THINK THERE WILL BE IMMEDIATELY IMPACT AND THAT PEOPLE WILL HAVE THE OPTIMISM WHICH IS BUILT AROUND IT FULFILLED, WHICH HAS BEEN REALLY PART OF THE PROBLEM FOR MANY POLICY DECISIONS, THE OPTIMISM WASN'T FULFILLED. SO I THINK THAT THAT'S A GOOD THING. IS THERE DANGER OF A RETRENCHMENT IF IT DOESN'T PASS? YES, ABSOLUTELY. DO WE NEED IT AS A COUNTRY? YES, WE NEED A LOWER TAX RATE TO BE COMPETITIVE. WE NEED TO HAVE GLOBAL – TERRITORIALISM AND WHATEVER WORD YOU WANT TO USE SO PEOPLE DON'T MOVE BUSINESS AROUND FOR TAX PURPOSES. AND SO I THINK THAT'S ALL GOOD.AND SO I THINK AS YOU LOOK AT TAX REFORM AND OTHER THINGS LIKE THAT, I THINK THEY'RE VERY IMPORTANT TO THE COUNTRY AND I THINK PEOPLE WILL DERRIVE THEIR EXPECTATIONS OFF THAT. IF THEY'RE MORE OPTIMISTIC, THEY'LL BORROW MORE AND LOANS WILL GO UP. BUT WE'RE SEEING DECENT GROWTH IN OUR COMPANY. WE'RE GROWING AT A – OUR COMMERCIAL LOANS YEAR OVER YEAR ARE 5% TO 6% UP. IT'S BECAUSE WE'VE BEEN DRIVING RESPONSIBLE GROWTH. SO WE'RE NOT GROWING AS FAST AS OTHER PEOPLE TWO OR THREE YEARS AGO, BUT WE'VE BEEN STEADY.

FROST: LET'S TALK ABOUT YOUR COMPANY AND THE EARNINGS RECENTLY. YOU'VE EXECUTED A PRETTY IMPRESSIVE COST-SAVING TURN-AROUND IN RECENT YEARS. CORE EXPENSES OVER TWO YEARS DOWN $2.4 BILLION, YET CORE REVENUES OF THE SAME PERIOD UP $4.6 BILLION, WHICH A LOT OF THE ANALYSTS HAVE BEEN COMMENDING AND FOCUSING ON. DO YOU NOW NEED TO INVEST IN ORDER TO GROW OR CAN THAT COST CUTTING ALONGSIDE REVENUE GROWTH CONTINUE FOR A COUPLE YEARS MORE?

MOYNIHAN: WELL, THERE WERE -- IF YOU THINK ABOUT WHAT WE'VE BEEN ABLE TO DO, IS WE'VE BEEN INVESTING THE WHOLE WAY THROUGH. SO EVEN WHEN WE HAD $72 BILLION IN OPERATING EXPENSES FIVE, SIX YEARS AGO DOWN TO THE 50 ODD WE HAVE NOW, WE WERE INVESTING THE WHOLE WAY MORE. 300 BILLION A YEAR TO TECHNOLOGY DEVELOPMENT, MORE SALES PEOPLE, NEW BRANCHES, WHATEVER, NEW PHYSICAL PLANT AND STUFF. SO WE'VE BEEN INVESTING ALONG THE WAY. AND THAT'S WHAT WE TALK ABOUT AS PART OF OUR RESPONSIBLE GROWTH THOUGHT PROCESS. AND WE HAVE TO BE SUSTAINABLE. WE HAVE TO BE ABLE TO INVEST IN THE FUTURE IN A SLOW GROWTH ENVIRONMENT. WHAT DOES THAT MEAN? WE HAVE TO BECOME INCREMENTALLY MORE EFFICIENT. AS WE REACH THE $53 BILLION TARGET WE HAVE NEXT YEAR, WHICH WE'LL HIT, WE TELL PEOPLE TO EXPECT THOSE EXPENSES TO MAINTAIN FLATTISHNESS. NOT NECESSARILY KEEP COMING DOWN BUT AS REVENUES RISE THAT'S A POWER FOR AN OPERATING LEVERAGE PLATFORM. ELEVEN QUARTERS IN A ROW OF OPERATING LEVERAGE, GOTTEN EVER WHICH WAY, SO THIS QUARTER IT WAS 1% REVENUE GROWTH, 3% EXPENSE DECLINE. OTHER QUARTERS IT'S BEEN 4% OR 5% REVENUE GROWTH AND EXPENSES WENT UP A LITTLE BIT. AND THAT – WE'RE GONNA BE MANAGING IT TO MAKE IT HAPPEN BUT IN THE AGGREGATE, YOU EXPECT WE HOLD EXPENSES HERE WHILE REVENUES GROW AND THAT'S POWERFUL LEVERAGE IN A COMPANY LIKE OURS.

FROST: NOW PART OF THE COST CUTTING HAS BEEN REDUCING YOUR HEAD COUNT. 5,000 HEAD COUNT REDUCTION OVER THE LAST TWO YEARS. SINCE YOU TOOK OVER, THE HEAD COUNT IS DOWN 74,000 SINCE 2009 OR 26% DOES THE PACE OF THAT HEAD COUNT REDUCTION CONTINUE OR DOES THAT TAPER OFF AS WELL?

MOYNIHAN: IT'S TAPERED, AND IT'S DIFFERENT. IT'S TAPERED BECAUSE THERE WAS SO MUCH TO DO BACK THEN AND WE'RE KIND OF IN A DIFFERENT PLACE. BUT LET'S THINK ABOUT IT YEAR OVER YEAR WE ADDED 2,000 SALES PEOPLE AT THE SAME TIME WE TOOK THE HEAD COUNT DOWN BY A THOUSAND OR SO OF TOTAL HEAD COUNT. AND SO WHAT WERE ALWAYS DOING IS REPOSITIONING PEOPLE. SO WE'RE APPLYING TECHNOLOGY TO PROCESS AND THAT ALLOWS YOU TO REDUCE HEAD COUNT. AND THEN YOU GO AND PUT IN A FRONT LINE IF YOU THINK ABOUT THAT DIMENSION, THAT'S A VERY POWERFUL DIMENSION. SO IF YOU THINK ABOUT THE AMOUNT OF SALES PEOPLE IN A COMPANY TO RELATION TO PEOPLE, OVER 40 SOME THOUSAND NOW, UP FROM – ITS LIKE 44 UP FROM 40ISH, BUT THE HEAD COUNT HAS BEEN DOWN A LOT MORE IN THERE WHICH MEANS WE HAVE MORE AND MORE CUSTOMER HELP, CUSTOMER RELATION MANAGERS, MORE GROWTH ORIENTED PEOPLE.

FROST: YOU MENTIONED TECHNOLOGY WHICH LOTS OF THE BANKS TALK ABOUT, YOU DO AS WELL. ARE WE AT AN INFLECTION POINT FOR DIGITAL BANKING WHERE THIS IS GOING TO TAKE OFF AND TRANSFORM THE INDUSTRY OR IS IT STILL QUITE A SORT OF A SLOW MOVE INTO DIGITAL BANKING?

MOYNIHAN: IT DEPENDS ON WHICH ASPECT HOW FAST THE GROWTH IS. BUT WE STILL ARE SEEING DOUBLE-DIGIT GROWTH IN CORE MOBILE BANKING. PEOPLE DOING MOBILE BANKING WITH US ACTIVE, HAVING USED IT FOR SOMETHING IN THE LAST 30 DAYS. AND WE HAVE A PRETTY – PRETTY HIGH LEVEL OF THEM, PRETTY HIGH PENETRATION. GETTING DOUBLE-DIGIT GROWTH MEANS THERES STILL DEMAND FOR CUSTOMERS THAT DON'T, SO I THINK YOU'LL SEE SOMETHING LIKE THE CORE ENABLEMENT OF DIGITAL BANK. ANOTHER QUESTION IS WHAT YOU DO UNDERNEATH IT. THAT GETS TO ZELLE. OR THAT GETS TO THE AUTO LOAN MOBILE CAPABILITIES WE HAVE NOW AND THE MORTGAGE LOAN MOBILE CAPABILITIES AND WHAT ERICA WILL BRING. YOU KEEP ADDING FEATURE FUNCTIONALITY CAPABILITIES THAT THE CUSTOMERS DEMAND UNDER THAT. AND THAT'S WHERE YOU'LL SEE THE BENEFITS OF IT. SO YES, THE TOP LINE OF PEOPLE THAT ARE MOBILE BANK CUSTOMERS USED TO GROW 50% YEAR OVER YEAR, 20% AND NOW AT 10%, BUT THE REALITY IS UNDERNEATH THAT, THE WAY THEY USE IT IS TREMENDOUSLY HELPFUL. AND ONE OF THE POINTS I USED WITH OUR BOARD IS YOU'RE SEEING OUR CALLS TO CALL CENTERS DROP 15% PER YEAR BECAUSE PEOPLE ARE USING THE DIGITAL DEVICES TO HELP THEM, TO DO THE WORK, TO FIND THE ANSWERS AND STUFF LIKE. THAT THAT'S A POWERFUL TRADE FOR US, EVEN IF IT DOESN'T RESULT IN A SALE WHAT IT'S RESULTING IN IS PEOPLE GETTING BETTER CUSTOMER SERVICE.

MOYNIHAN: AND LOWER COSTS AS WELL. BRIAN, WE'VE GOT A COUPLE OF QUESTIONS FROM THE STUDIO.

WAPNER: BRIAN, IT'S SCOTT WAPNER, THANKS FOR COMING ON THE PROGRAM. THANKS FOR COMING ON HALFTIME. I DO HAVE A COUPLE THINGS FOR YOU AS WE START TO LOOK AHEAD TO WHO MAY BE THE NEXT CHAIRMAN OR CHAIR OF THE FED. DO YOU THINK JANET YELLEN HAS DONE A GOOD JOB AND DO YOU THINK SHE SHOULD BE REAPPOINTED BY THE PRESIDENT?

MOYNIHAN: I THINK THE QUESTION WHO THE REAPPOINTMENT IS UP TO THE PRESIDENT AND OTHERS. IN TERMS OF, THE FED HAS DONE A GREAT JOB I THINK OF GUIDING THIS ECONOMY, THE LARGEST IN THE WORLD, BACK FROM OVER THE LAST EIGHT, NINE, TEN YEARS NOW INTO A PLACE THAT'S VERY CONSTRUCTIVE, GROWING AT 2%. SO I THINK -- BUT I'LL LEAVE THE APPOINTMENTS UP TO THE PEOPLE THAT ACTUALLY MAKE THEM.

WAPNER: DO YOU THINK IT MATTERS TO THE MARKETS WHO THE NEXT CHAIR OF THE FED IS? I MEAN, GIVEN WHAT YOU SAID, IT WOULD SEEMINGLY NOT MATTER TO YOU. YOU MUST HAVE AN OPINION OF WHO MAY BE BETTER FOR YOUR BUSINESS IN THE WAY THE MARKETS WORK?

MOYNIHAN: I THINK ANY -- YOU KNOW, I THINK JUST LIKE WHEN I BECAME CEO, THE SERIOUSNESS OF THE TASK WHEN YOU TAKE OVER A STEWARDSHIP OF IN THAT CASE THE FEDERAL RESERVE MONITOR POLICY I THINK WILL RESULT IN THE FACT THAT THERE ARE MANY MEMBERS ON THE PROCESS COMMITTEE AND THE DEVELOPMENT OF DATA. I THINK WHERE PEOPLE MAKE GREAT DIFFERENCES BETWEEN A OR B OR C, AT THE END OF THE DAY THE REAL FACTS BEAR OUT WHAT YOU NEED TO DO AND I THINK IT WILL BE LESS IMPACTFUL FOR OUR BBUSINESS THAN PEOPLE MIGHT SPECULATE.

WAPNER: THE OTHER THING IS, IM LOOK AT A STORY RIGHT WITH A HEADLINE, AND I QUOTE "BIG BANKS SCORE WIN WITH SCRAPPING OF CONSUMER CLASS ACTION LAWSUIT RULE." IT REFERS TO THAT SENATE VOTE YESTERDAY, ROLLING BACK THAT REGULATION THAT WOULD HAVE RESTRICTED MANDATORY ARBITRATION BY 2019. IT WOULD HAVE GIVEN CONSUMERS THE ABILITY TO FILE CLASS ACTION LAWSUITS, AS YOU KNOW. GIVEN THE SHENANIGANS THAT WENT ON AT WELLS FARGO AND SOME OF THE OTHER THINGS THAT HAVE HAPPENED AT THE BANKS THROUGHOUT THE LAST MANY YEARS, DO YOU THINK THAT WAS THE RIGHT DECISION YESTERDAY BY THE SENATE?

MOYNIHAN: WELL, I THINK YOU HAVE TO SORT THAT OUT. AS IT RELATES TO OUR COMPANY, WE HAVENT HAD ARBITRATION IN OUR DOCUMENTS AND CARD SINCE 2009 IN DEPOSIT PRODUCTS A SIMILAR LENGTH OF TIME AND MORTGAGES BEFORE THAT SO IT REALLY WASN'T A RELEVANT ISSUE FOR BANK OF AMERICA. WE DON'T HAVE THOSE CLAUSES AND HAVEN'T FOR MANY YEARS WHEN YOU THINK ABOUT IT IN THE BROADER CONTEXT, AS YOU THINK ABOUT THE INDUSTRY, THE LESSENING OF REGULATION OF SMALL AND MIDSIZE BANKS IS A REAL ISSUE. AND WE AS BIG BANKS HAVE BEEN FOR THAT IN HELPING TO TRY TO CREATE THE ATMOSPHERE OF WHICH THAT HAPPENS. SO I THINK THIS IS ANOTHER CASE WHERE THERE'S A BELIEF IN THE SYSTEM OF THE SMALL AND MIDSIZE BANKS THAT THEY'RE OVERREGULATED AND THIS WAS ANOTHER INTRUSION AND THAT WAS WHAT YOU SAW REFLECTED IN THE VOTE. BUT TO BANK OF AMERICA, IT WASN'T A RELEVANT QUESTION.

FROST: GIVEN THAT THE WELLS FARGO SCANDAL HAS RATTLED ON SO LONG, HAS THAT ANNOYED YOU AND SOME OF YOUR FELLOW CEOs AS BANKS THAT STARTED TO COME OUT OF THE CROSS HAIRS A LITTLE BIT. HAVE YOU FELT THAT IT'S DRAGGED THE INDUSTRY BACK INTO THEM A LITTLE?

MOYNIHAN: OUR CUSTOMER SCORES ARE AS HIGH AS THEY HAVE EVER BEEN, HIGHER THAN THEY WERE BEFORE THE CRISIS, HIGHER THAN WHEN THE STOCK PRICE WAS THIS OR THAT. AND SO I THINK OUR CUSTOMERS SEE IN OUR COMPANY WHAT WE DO FOR THEM THE WAY WE RUN THE BUSINESS MODEL, YOU KNOW, WE'VE BEEN DOING IT FOR MANY YEARS NOW. IT'S RESPONSIBLE GROWTH. WE TRY TO GET THE PRIMARY CHECKING ACCOUNT IN THE HOUSEHOLD. WE WANT THE PRODUCTS TO BE USED. SO I THINK IT HASN'T REALLY BEEN THAT IMPACTFUL ON US.

FROST: SWITCHING FOCUS, BRIAN, A LOT OF YOUR PEERS HAVE MENTIONED BITCOIN RECENTLY OR BEEN ASKED ABOUT BITCOIN RECENTLY. WHICH CAMP DO YOU FALL INTO, THE FRAUD CAMP OR THE OPPORTUNITY CAMP?

MOYNIHAN: I THINK THE QUESTION ANONYMOUS CURRENCY IS SOMETHING THAT HAS TO BE THOUGHT THROUGH FROM A POLICY DECISION. THE ABILITY TO TRACK MASSIVE AMOUNTS OF MONEY MOVING THROUGH IS TRICKY. THE IDEA OF DIGITAL CURRENCY IS NOTHING NEW. WE'LL SEND OUT – HALF OF OUR CONSUMER PAYMENTS WHICH ARE 2 TRILLION DOLLARS YEAR TO DATE ARE DIGITAL. SO THIS IS NOT SOMETHING NEW OR DIFFERENT. IT'S THE ANONYMOUS THING THAT CAUSES DEBATE FROM AN OPERATIONAL PERSPECTIVE. FROM THE SPECULATION, I'LL LET YOU AND YOUR COLLEAGUES TALK ABOUT WHAT IT'S WORTH. BUT THERE OUGHT TO BE A HARD LOOK AT THE POLICY OF ANONYMOUS CURRENCY BECAUSE THE ABILITY TO TRACK IS ONE OF THE THINGS WE USE AGAINST TERRORISM AND AGAINST IMPROPER, YOU KNOW, ILLEGAL BEHAVIOR AND THAT'S THE REASON WHY THERE'S ONLY $100 BILLS IN THE U.S. ECONOMY. IS YOU DON'T WANT LARGE AMOUNTS OF MONEY TO TRAVEL WITHOUT ATTRIBUTION, AND THAT'S WHAT THIS BANKING SYSTEM DOES FOR THIS COUNTRY AND THE WORLD IS WE TRACK ALL THIS MONEY AND THE DATA CAN BE FOUND AND THEN YOU CAN DO THINGS TO FIND PEOPLE, BAD ACTIVITIES, ETC.

FROST: SO BITCOIN IS CURRENTLY USED FOR CRIME, IN PART?

MOYNIHAN: YOU CAN READ THE STORIES, AS I CAN.

FROST: QUESTION AGAIN FROM THE STUDIO, FROM JOE.

JOE TERRANOVA: GOOD AFTERNOON MR. MOYNIHAN. THIS IS JOE TERRANOVA. SO, I CHECK BOTH BOXES, BOTH AS A SHAREHOLDER AND A CUSTOMER AND I'M VERY HAPPY WITH BOTH OF THOSE CONDITIONS YOU'VE DONE A FANTASTIC JOB OVER THE LAST COUPLE OF YEARS. BUT NEARLY NINE YEARS AGO YOU PICKED UP THE MERRILL LYNCH FRANCHISE FOR $50 BILLION. AS WE SIT HERE TODAY, YOU SEE THE MOVEMENT TOWARDS PASSIVE INVESTING. I READ SO MANY ANALYSTS NOTES AND THE FIRST THING THEY SAY IS IT'S TIME FOR MR. MOYNIHAN TO SPIN OFF MERRILL LYNCH OR EVEN TO SELL IT. WHERE DOES MERRILL LYNCH FIT IN RIGHT NOW IN YOUR VISION FOR THIS COMPANY MOVING FORWARD?

MOYNIHAN: WELL, THE ISSUES FACING THE WEALTH INVESTMENT MANAGEMENT BUSINESS FROM REVENUE COMPRESSION, PASSIVE INVESTING TRENDS, AUTOMATION, ROBO ADVISERS AND ALL THOSE THINGS, WE WILL DRIVE THAT THROUGH, JUST LIKE WE'VE DONE IN ALL OUR OTHER BUSINESSES, APPLYING THE TECHNOLOGY IN A WAY THATS GOOD FOR OUR CUSTOMERS AND GOOD FOR OUR TEAMMATES AND YOU'LL SEE US CONTINUE TO DO THAT. SO OUR MERRILL LYNCH IS ONE OF THE

FASTEST GROWING ON THAT SIDE OF THE BUSINESS. WE'RE GETTING TREMENDOUS SHARE IN THE 1 MILLION ABOVE INVESTORS. THE QUESTION IS HOW DO YOU HANDLE THE SORT OF BETWEEN WHERE THE INVESTMENT STRATEGIES AND STUFF, YOU HAVE TO BE VERY EFFICIENT FORTHE INVESTOR GIVEN THE AMOUNT OF MONEY AND REVENUE STREAMS FOR THAT. SO ANDY SIEG AND TERRY LAUGHLIN AND KEITH BANKS AND KATY KNOX ARE ALL WORKING ON THIS. AND YOU KNOW, SPINNING IT OFF WOULD BE NOT GOOD FOR ANYBODY AND IT'S A VALUABLE PART OF WHAT WE DO AND IT'S AN ITEGRATIVE PART OF WHAT WE DO. WE'LL HAVE TREMENDOUS REFERRAL FLOW BETWEEN MERRILL LYNCH U.S. TRUST, BETWEEN THE CONSUMER BUSINESS TO MERRILL LYNCH, BETWEEN THE 401(k) PLATFORM, ALL THESE BUSINESSES ARE MUCH MORE POWERFUL ALIGNED AND DRIVEN ON A CUSTOMER FOCUSED BASIS THAN A STAND-ALONE COMPANY IS. AND SO IT PROVIDES GREAT VALUE TO OUR CUSTOMERS AND OUR TEAMMATES AND OUR SHAREHOLDERS AND IT WILL CONTINUE TO DO SO.

PETE NAJARIAN: BRIAN, THIS IS PETE NAJARIAN. REAL QUICK QUESTION ABOUT LOAN GROWTH. IT WAS SO IMPRESSIVE THIS LAST QUARTER, THE CUSTOMER LOAN GROWTH THAT YOU GUYS WERE ABLE TO PUT UP. BY THE WAY, I'M A SHAREHOLDER SINCE 2014. I BELIEVE IN THE COMPANY.

MOYNIHAN: THANK YOU.

NAJARIAN: JUST LIKE BUFFETT. I CONTINUE TO THINK YOU GUYS ARE DOING EVERYTHING RIGHT. HOW DOES THE LOAN GROWTH LOOK TO YOU GOING FORWARD FROM HERE AS WE START TO SEE THE TEN-YEAR AND ALL THE REST OF THE MOVEMENT THAT WERE STARTING TO SEE IN THE BOND WORLD.

MOYNIHAN: WELL, WE SEE -- IF YOU START FROM WHAT DRIVES THE US CONSUMERS -- THE ECONOMY, THE CONSUMERS DO. WE'VE SEEN YEAR-TO-DATE CONSUMER PAYMENTS, CASH, CHECKS WRITTEN, DEBIT/CREDIT CARDS ARE UP, 6%, 7%, WHICH IS ALMOST TWICE THE RATE THEY WERE UP THE LAST COUPLE OF YEARS YEAR OVER YEAR AND THAT'S THROUGH TEN MONTHS ALMOST. SO YOU KNOW, CONSUMERS ARE GONNA DRIVE THAT ECONOMY. LOANS WILL FOLLOW THAT. OUR JOB IS NOT TO CREATE THE ECONOMY, OUR JOB IS TO FACILITATE IT AND PROVIDE THE GREASE THAT MAKES IT HAPPEN AND SO OUR LOAN GROWTH IS REFLECTING THAT. AND I THINK THAT CAPITAL MARKETS ARE WIDE OPEN SO THAT PUTS PRESSURE ON PEOPLE, GET OUT TO THOSE MARKETS GET OUT AND FUND THAT WAY, BUT THAT'S PART OF THE FLOWS AND WE DO THAT BUSINESS ALSO. SO I THINK YOU'LL SEE GOOD, SOLID MID, SINGLE DIGIT LOAN GROWTH FROM US IN THE CONSUMER BUSINESSES YOULL SEE SLIGHTLY FASTER IN THE CORE BUSINESSES BECAUSE OF THE CATCHUP IN MARKET SHARE THEY'RE IN THE MIDDLE OF GETTING.

FROST: BRIAN, JUST A QUICK QUESTION ON BREXIT AS WELL. WE HEARD FROM LLOYD BLANKFEIN THEY SAID HE WAS GOING TO SPEND A LOT MORE TIME IN FRANKFURT. YOU'RE MOVING SOME HEAD COUNT TOWARDS DUBLIN. HOW SIGNIFICANT A MOVE IS THAT? DO YOU FEEL BREXIT IS SHAPING UP

THE WAY THE NEGOTIATIONS ARE GOING TO BE A SIGNIFICANT THREAT TO LONDON AS A FINANCIAL CENTER?

MOYNIHAN: I THINK IT'S NOT GOOD, BECAUSE IN THE END OF THE DAY, WITHOUT BREXIT HANGING OVERHEAD, WE'D JUST BE OUT PLUGGING AWAY, WORKING FOR CUSTOMERS, YOU KNOW, ADDING PEOPLE, BRINGING TEAMMATES INTO LONDON ALL OF THAT GETS PULLED INTO QUESTION SO IT'S NOT GOOD. IT'S NOT NECESSARILY WHAT EVERYBODY THINKS ABOUT TRADERS LIKE THIS ON THE FLOOR, IT'S THE ACCOUNTANTS WHO SUPPORT THEM, IT'S THE HR TEAM THAT SUPPORTS THEM, IT'S THE LEGAL TEAM THAT SUPPORTS THEM, IT'S THE INVESTMENT BANKERS, IT'S THE CORPORATE BANKERS, IT'S THE PEOPLE THAT RUN THE CASH MANAGEMENT FRANCHISE. SO THE IDEA TO HAVE A HUB THAT SUPPORTED A REGION OF THAT SIZE AS BIG AS THE UNITED STATES IS NO DIFFERENT THAN NEW YORK TO THE REST OF THE UNITED STATES. NOW WHEN I THINK ABOUT I CAN'T QUITE OPERATE THIS WAY, IT'S DISRUPTIVE. AND BY THE WAY, EVERY INDUSTRY IS GOING THROUGH THIS AND I THINK IT BEHOOVES US ALL TO GET A SET OF RULES WE CAN UNDERSTAND. THE PEOPLE VOTED. WHICH, DID WE ALL WANT IT NOT TO HAPPEN? SURE. BUT THEY VOTED, IT'S GONNA HAPPEN AND NOW THE QUESTION IS WHAT ARE THE RULES I THINK IF WE CAN GET SOME RULES WE CAN FIGURE OUT HOW TO MITIGATE THE IMPACTS TO EVERYONE IF WE DO THIS PERFECTLY, THE CLIENTS DON'T GET ANY BETTER SERVICE. IF WE DO IT PERFECTLY. SO THERE'S NO UPSIDE, IT'S JUST CAN WE AVOID THE DOWNSIDE. WHETHER IT'S LLOYD OR MYSELF OR JAMIE, JAMES, EVERYBODY IS TRYING TO FIGURE OUT HOW DO WE MAKE SURE THE DOWNSIDE DOESN'T OCCUR, THERE'S NO DISRUPTION IN THE MARKETS, DISRUPTION OF CLIENT FLOWS, THE COSTS GO UP TO A POINT WHERE YOU HAVE TO THINK ABOUT COST DEPLOYMENT. THAT'S WHAT WE'RE TRYING TO AVOID. THAT NEVER PLAYS WELL TO THE INCUMBENT AND THAT'S WHAT LLOYD IS FACING.

FROST: ALRIGHT, WELL, BRIAN, THANK YOU FOR JOINING US AND CONGRATULATIONS AGAIN ON THE LAST SET OF NUMBERS, THE SHARE PRICE UP NICELY SINCE THEN. AND IT'S BEEN GREAT TO BE BACK

HERE. THANK YOU VERY MUCH.

MOYNIHAN: THANK YOU. THANK YOU GUYS ON THE DESK TOO.

For more information contact:

Jennifer Dauble
CNBC
t: 201.735.4721
m: 201.615.2787
e: jennifer.dauble@nbcuni.com

Emma Martin
CNBC
t: 201.735.4713
e: emma.martin@nbcuni.com

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