Bank of America CEO takes reins

RALEIGH, N.C. - Bank of America Corp.'s new chief executive officer, Brian Moynihan, said yesterday his company is continuing to recover from the financial crisis but will remain cautious even as it expects to grow in 2010.

"Recovering from an [economic downturn] cycle, you have to be mindful of what got you here," Moynihan said during an interview with the Associated Press on his first official working day in his new job. "That's where you have to be careful that you don't grow too fast and take on excessive risk, which is a lesson that we and everyone else learned."

Banks have been strongly criticized for making mortgage loans to homeowners who could not afford their houses and began defaulting in growing numbers in 2008 and 2009. Those risky loans, which fed a bubble in housing sales and prices, are known as subprime mortgages. The collapse of the bubble triggered a widespread financial meltdown, with credit still hard for many businesses and individuals to get. That, in turn, made the recession more severe.

Speaking later in a speech at an annual economic forecast forum here, Moynihan added: "We as an industry cannot avoid the simple fact that we caused a lot of damage, and we have to help make sure it doesn't happen again."

Moynihan, 50, became CEO of the Charlotte, N.C., bank on New Year's Day, when Kenneth Lewis retired. Bank of America is the sixth-largest bank serving the Philadelphia area, based on deposits.

Moynihan is taking over as Bank of America faces continued loan losses in the billions of dollars. It lost more than $2.2 billion in the third quarter as bad debt kept rising. Though credit delinquencies remain at historic highs, Moynihan said that the losses "do appear to be stabilizing."

Moynihan faces a tough road. He will have to cool relations with regulators, overcome skeptics in Congress, handle investigations into the bank's purchase of brokerage firm Merrill Lynch, restore fractured morale, and deal with cultural divides between the bank's several centers of power.