Bank of America Corp Chief Executive Brian Moynihan told Fox Business News on Friday that he supported a $50 billion orderly liquidation fund for large U.S. financial firms, but thought it should be built up over time.
The CEO of the largest U.S. consumer bank said in a transcript of the interview that he would rather not pay the money all at once.
I don't think there's a need to pre-fund it. We don't pre-fund the FDIC, Moynihan said on the Fox Business Network's Neil Cavuto program to be aired later on Friday.
We've been good for it for 80 years, I guess, now, more or less, he added.
The proposed fund, one of the more contentious provisions of the proposed reform bill, would absorb the costs of winding down the largest financial firms, similar to the Federal Deposit Insurance Corporation, which insures depositors' money.
All U.S. banks make regular payments into the FDIC's fund that protects consumers' deposits after a bank failure. The payments can be adjusted to meet the needs of the fund during a crisis.
I think the idea of an industry saying, 'Look, if we have a series of things that cause losses and we have to liquidate institutions to pay for it,' I don't think it's a bad idea, Moynihan said. Pre-funding that, how they're going to do it, that's a whole separate question.
But the future of proposed $50 billion liquidation fund appears to be in doubt.
Senate Republicans have demanded the provision be stripped from any reform bill, and U.S. Senator Christopher Dodd, D-Conn., said the matter would be under discussion this weekend as both parties hammer out a basic framework for the proposed legislation.
(Reporting by Joe Rauch)