Brian Moynihan told a conference audience that Bank of America expects trading revenue to be flat this quarter, and bank shares fell on it. His first answer to Bloomberg was that a flat quarter would still be one of the best third quarters in the company's trading history.
The comparison is what changed, not the franchise: last year's third quarter was the recovery from the tariff shock, this year's second quarter was the AI trade, and risk has since come out of the system.
"It's just sometimes the market quits doing things, and that's one of these times."
Moynihan has run Bank of America since 2010, bought Merrill Lynch into it during the crisis, and sits on the interview as both a lender to the AI build-out and a large buyer of the technology.
The full interview is covered here so you can skip it. 16 minutes of audio, 15 minutes of reading.
Here are the 11 insights that matter.
👤 Guest: Brian Moynihan, Chairman and CEO of Bank of America, speaking from the sidelines of the Barclays Global Financial Services Conference in New York
🎙️ Host: Dani Burger, Bloomberg anchor and reporter
📰 Published: 14 September 2026 on YouTube (Bloomberg Podcasts)
🔴 YouTube | 🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 16 min
Key Takeaways
Flat trading this quarter would still rank among the bank's best third quarters ever
The comparison is a recovery quarter last year against a de-risked one now
Rates moving 100 basis points in a short period is what paused debt financing
The equity pipeline — IPOs and secondary offerings — is still full
Bank of America deployed more than $400 million in AI capabilities this year and will spend more next year
The bank will not deploy fully autonomous agents, because it cannot see how it would control them
Moynihan wants one federal AI rule rather than fifty state ones
A patchwork makes the technology harder to use, not just harder to sell
A slowdown at the frontier would not stop the value, because the bank does not use frontier models
He still expects a super cycle in AI capital spending, at some multiple of the plan
Consumers spent 4% more in August than a year earlier, and credit quality is strong
1. Flat Is Still a Record Q3
Burger opened on the news Moynihan had made minutes earlier at the conference: trading flat for the current quarter, against a second quarter that set a high watermark.
His first move was to reframe the number. "So I think just to keep a perspective, if we end up with a quarter of what we just said flat, it'll be one of the best third quarters that we've ever had in the trading history of the company."
The comparison is doing the work. Last year's second quarter was the tariff shock; this year's second quarter was up a lot against it in trading and investment banking. Last year's third quarter was the recovery from that shock, when the fear that the economy would stop cold turned out to be wrong and everything kicked back in.
This year's third quarter runs against that rebound, and into a different market: the AI trade arrived, and risk has come out of the system since. He pointed at Korea and leverage as the areas being written about.
Underneath the total, the mix splits: equities up, fixed income bouncing around and a little down, which nets to flattish.
He credited the desk rather than the tape. "But the team, and Dennis and Sufian and Jimmy's leadership, the team is doing a great job. It's just sometimes the market quits doing things, and that's one of these times."
On the trading line itself he said the business is flattish at more than $5 billion of revenue, and called that good.
2. What Q4 Needs
Asked whether the pause runs through the end of the year, Moynihan named the condition rather than the date.
What has to happen first is that rates settle. "I think as soon as we get some stability around the rate structure, I mean, they got the Fed meeting this week and sort of what people get a common view of that, then the rates will settle at some point." That, he said, should help trading activity.
The equity pipeline is not the problem: "We've got a lot of pipeline IPOs, secondary offerings, things coming on that we know will go through."
Debt financing is, and the reason is mechanical. An issuer has to be able to commit to a deal and bring it a few days or a week later, and that requires a rate structure that is not bouncing around.
The cause he named for the pause was the move itself: rates up 100 basis points over a short period, which makes people wait, and leverage coming out of the system for a while.
His framing of the whole bank is that trading is not most of it. He described Bank of America as 60% core net interest income, with expenses being managed, credit quality good and consumers spending — so an unusually explosive quarter mitigating feels strange without being a problem.
Burger's read back was that it is a good problem: the high watermark was set so high that returning to it is the hard part. Moynihan agreed the business ramps back up, with the caveat that August always loses activity and that the second or third quarter traditionally comes down.
3. The Prime Brokerage Hit
Burger raised the second-quarter blow-up at a fund the bank prime-brokered, and asked whether anything had changed since.
Moynihan would not discuss clients, and answered on process: the bank always looks back at everything, and the assumption should be that its risk management practices were good then and are good now.
His evidence was the trading record through it: "We've made a lot of money this quarter. We've made money every day this thing."
The caveat he attached is that a good record does not survive a changed world: the team does well, but that does not mean the environment cannot change quickly around it.
4. The NASCAR Drivers
Burger put his own past warnings about AI to him — he had told Bloomberg in July that he worried about the structural impact — and asked whether he is worried about where this is heading now that the conversation has moved to humanity itself.
He had already been asked on another network that week whether he would slow down. "And I said, I think they should slow down, but you know, I'm not the person running these companies. They have now said they should slow down."
His image for what has happened is racing. "You basically had the analogy I said we were talking about at the summit today was you have the NASCAR drivers saying, please slow down the cars."
The open question is the mechanism, not the intent: "And the question is, who's going to decide how you slow them down?" He listed the candidates — the governing body, meaning Congress; the administration; the private sector refusing to buy a product with those effects; or society at large.
What he reads as good news is agreement on the diagnosis: the leaders of what he called unbelievable companies have said the pace has to slow, and that the pace of change has to be absorbed.
The specific line they drew is the one he thinks matters: do not release an agent that can act on its own.
"When you put a completely autonomous agent out there, that's the big concern." The risks he named are an agent causing problems through hacking, or getting help from other people.
His read of the motive is commercial as well as ethical: "So I think they're wiser saying, hey, we have a great product here. Let's not gum it up by having to do some things that cause an over-regulation."
5. $400M of AI at the Bank
Burger's follow-up was about the financial industry's own role: the banks are not building AI but they are financing it, so do they have a responsibility for how it develops?
Moynihan's first answer was that the bank is a customer, not just a lender. If there is going to be a revenue stream for these companies, it comes from companies like his.
He put a number on it: Bank of America deployed more than $400 million in AI capabilities this year, and will deploy more than that next year.
The bank's own history with the technology runs longer than the current cycle — it built Erica a decade ago — and he said the belief in digital handling of data, information and process runs to the company's core.
The constraint is accuracy, and he made it a customer-experience point rather than a technical one. "The question is, we believe as a company we have to give the right answer." A wrong answer from Erica is a bad client experience, so the bank deploys with controls and people in the loop.
The second responsibility is financial, and this is the part he says is new. "As a financier, we have to worry about what's the liability." Product liability talk around AI is already circulating, and the bank has to think about it as a lender while the markets think about it as a funder.
His worry is the clock. "And product liability around products from cars and things took years to develop." Everything now moves faster than that, and there is a competitive race with other parts of the world running alongside, which adds complexity.
6. The King, and Liability
Burger asked whether AI risk is now at the level that belongs in an initial public offering prospectus. Moynihan's answer moved from the S-1 to a meeting in Scotland.
The risk he would expect to see disclosed is regulatory: if the issues get bad enough that lawmakers over-regulate, the revenue stream arrives more slowly.
He had not read the most recent prospectuses, and deferred to the drafters with a note about his own career: "I was a lawyer at one point in my life, smart lawyers are thinking through all those risk factors."
"But the real question is, can we get this right?" His evidence that people are trying: the Pope has written on it, the King has convened people, the companies themselves are engaged and the administration has thought about it.
The bank's own line is drawn and he stated it plainly: it will not deploy autonomous agents. "We said we can't see how we could actually control this thing." The difficulty is that the thing is doing what it is supposed to do — going and solving problems over and over.
What he is enthusiastic about instead is applied AI and semi-autonomous agents, which he called pretty interesting stuff.
On the Scotland meeting, he said he attends in a role he has held for years: "I'm there in my role for the Sustainable Markets Initiative that I've been working on with His Majesty for years, seven, eight years now." He did not have the attendee list, but expected good representation, and credited the King's convening power — something he has watched work on the energy transition.
7. Self-Regulation First
Burger asked the direct policy question: with the President saying no AI guardrails are needed, should regulators step in, or is this a moment for the companies to police themselves?
His answer is that it is always the former. "Well, I think it's always a self-regulatory moment because in the end of the day, you shouldn't require, just like with us regulation as a bank."
His standard for his own industry is tighter than the rulebook: "We regulate ourselves tighter than the regulators do because in the end of the day, we think it's the right thing to do for the customer, right thing to do for the future."
He anchored it in the date. "Here we are. Really on the anniversary of Lehman failing and us buying Merrill Lynch at Bank of America in just a hugely disastrous time for the financial services industry from which we recovered and done a great job."
"That was a lot of self-regulation, honestly, and that's important."
So hearing the AI companies say they take the risk seriously is what he calls encouraging, and first order.
8. One Rule, Not Fifty
Burger pushed on the alternative: if these companies do not police themselves, do they risk a blow-up of their own?
Moynihan's answer named who is already waiting: "There's a plaintiff's bar, there's a state attorney general's, there's a state legislature's."
What he actually advocates for is uniformity rather than leniency. A patchwork of state rules is hard to work out and hard to comply with, and he framed the test as whether a firm can operate with the same tools and capabilities in California, Nevada, Texas and North Carolina.
The cost falls on the user as well as the seller — he said it makes the technology tougher for a bank like his even to use.
"So I think the idea is a federal regulation."
What he called interesting and important is that the companies moved first, on the reasoning that they are balancing the long-term health and structure of their businesses. He said that should be heavily encouraged.
"But it's good news that the NASCAR drivers are saying, let's slow down the engines and make sure we can be safer."
9. A Super Cycle Either Way
Burger asked what a meaningful AI slowdown would do to a banking sector that has done well out of the trading, mergers and listings the boom produced.
The theoretical chain he accepted is that revenue streams slow, so the build-out slows.
The reason he is not worried is which models are actually in use. "The models we're using now to get all the value we're getting at Bank of America and other companies are not these models. These are the frontier. These are the most advanced. The models we're using are versions before that. These models haven't even been deployed yet. This is in a test."
So the value the bank and society are already getting does not depend on the frontier, and nor does the data center build behind it — it is a question of which growth curve, up or down, and of whether it can be built as fast as people want.
On the capital spending the banks finance, he was unambiguous: "It'll be a super cycle, I'm fairly convinced, because we see the value." Seeing the value means being willing to pay for it, which creates the revenue stream that funds the build.
"Is it build X or 75% X or 50% X? It's still a lot of X to get to."
10. Winning Top Billing
Burger asked what it takes for Bank of America to get top billing on the largest deals, noting that it has been in the big listings but not always at the front — she named SpaceX.
His answer starts with the relationship, and he confirmed the bank participates in SpaceX.
The differentiator he claims is distribution: "What we have unique at Bank of America is we have the retail capability to distribute to retail."
He gave two reasons issuers want that, and the second is the one usually left out. Retail is a good shareholder base — and also a good user base: "They are the people who keep the product knowledge out there and stuff."
The mechanical wrinkle he raised is timing. Fees are recognized on cash received rather than deals announced, so a transaction slipping a quarter moves the number, and that is especially sensitive when the fees are large.
"It's just sometimes you're a little luckier and sometimes you're not so lucky."
The underlying flow he guided to is $1.6 billion to $1.8 billion, which is what the bank told people, and he called that a good strong quarter. Two-billion quarters have been rare — one last quarter, and one in the same quarter a year earlier.
The strategic point is integration: he wants a combined corporate and investment banking business, inside what he described as a franchise making a couple of billion dollars a quarter.
11. Three Hikes, Not Cuts
In the last minute, with a Federal Reserve decision two days away and the 10-year Treasury yield at 5% for the first time since 2023, Burger asked how he reads the stress of higher yields.
He separated the two questions immediately: long-term yields and short-term yields are different problems.
On the short end, the bank's economists have had the Fed doing three rate increases for a long time, and he said it now looks closer to right. Whether they come this year, or two this year and one early next, the purpose is to put back the cuts that were made and bring inflation down.
His firm's view on the timing of that is slow: "We don't think inflation, even with three rate rises, would get down to where the target would be until the end of 27 and 28."
The reason he can live with it is the underlying economy. "Our consumers spent 4% more money in August than they did last August." Credit quality is very strong, and small and medium-sized businesses are borrowing.
The transmission point he flagged is counter-intuitive: "Interestingly enough, short-term rate moves affect the small, medium-sized line of credit users faster than they do the consumer because mortgages are fixed, cars are fixed, and credit cards, the rate move doesn't mean as much."
He does not see stress yet, and his reference is recent history — rates were at these levels 12 and 18 months ago and borrowers were fine.
His frame for the whole rate structure is that the word people are reaching for is wrong. Everybody says higher; he says normal. A normal rate structure is a good place for the US to be and helps the rest of the world normalize too.
"It was not normal from 2009 to 2019 to have zero rates. That is not normal."
Bonus Insights
Moynihan's framing of the second quarter is that the shock is the comparison, not the deterioration: an explosive quarter mitigating "feels a little bit strange, but then it'll get back and grow from here."
He noted the seasonal pattern under the cycle — the summer is the summer, and August loses activity every year regardless.
Asked whether the financial industry has a duty on ethical AI development, he described the bank's role as bringing its own perspective and helping the developers think, alongside governments and others, with cybersecurity and hacking as a named area of joint work.
Burger's question about whether he leads the financial industry's delegation to Scotland he left unanswered on the specifics, saying only that the meeting is organized through a group there.
Moynihan's bottom line is that the trading number is a comparison problem rather than a franchise problem, that the AI build he is financing runs on models a generation behind the frontier and so survives a frontier slowdown, and that the regulatory answer he wants is one federal rule arrived at after the industry has already disciplined itself.
Products, Companies & Tools Mentioned
Bank of America (60% core net interest income, more than $5 billion of trading revenue in a flattish quarter, and investment banking flow guided to $1.6 billion to $1.8 billion)
Erica (The bank's decade-old virtual assistant, and his example of why the answer has to be right the first time)
Merrill Lynch (Bought during the crisis; he used the anniversary to argue that recovery came from self-regulation as much as rules)
SpaceX (Named by Burger as a deal where the bank was not top of the cover; Moynihan confirmed Bank of America participates)
Barclays (Host of the Global Financial Services Conference in New York, where the interview and his flat-trading comment were made)
Sustainable Markets Initiative (The body under which he has worked with the King for seven or eight years, and his role at the Scotland meeting on AI)
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