Bank Of America CEO: Low Oil Prices Will Be A 'Long-Term' Benefit For Us

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Bank of America Corp BAC CEO, Brian Moynihan, was on CNBC Tuesday to discuss how low oil prices are impacting the bank and its broader affect on the economy.

 

“We have a $900 billion loan portfolio and our exposure in oil is around $40 billion that we disclosed,” Moynihan  said, “but the big part of that is to very large companies that have a lot of different revenue sources of which oil integrated products is one, but as… we look at it in US especially, you have a plus and a minus and so both from a macro sense and a company sense we stress oil down to 30 [$30 per barrel] hold it down there for eighteen months.”

 

He continued, “We do all this, it’s part of the work, the reason …of the last crisis was to keep stress testing yourself all the time. So, we have run these stress tests, consistently have been running them  and it doesn’t have a huge impact on us.”

 

Why is Oil Falling And What Are The Broader Affect In Economy Due To It?

 

“If you look at the consumers side, it’s been pretty remarkable and [I] just looked into data from last week, oil spending is effectively is down dollar a gallon, but the consumers are spending that money plus more and that means the consumers are benefitting by this, low oil, and are spending money which is good for the broad economy and company like ours, which has a lot more consumer exposure than we do oil company exposure, it’ll be a benefit long-term,” Moynihan added.

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Posted In: CNBCMedia
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