The chairman and chief govt of one of many world’s largest banks says he’s “committed to the UK”, regardless of latest political and financial turmoil.
Brian Moynihan, of Bank of America, additionally informed Sky News that he’s not involved concerning the prospect of a rise in company tax, including: “We don’t live or die by our tax rate.”
Mr Moynihan stated of the UK’s latest political turbulence: “We don’t get too wound-up about [elections].
“It’s at all times one thing within the second, nevertheless it’s a inhabitants’s job to elect officers and our job to handle our firm given these elections.
“I feel the UK is likely one of the main economies and main international locations on the earth and is a bastion of stability on the whole sense.
“And we’ve got to go through a midterm election in the US, we’ve got to get to the other side of that, and then stability can settle in.
“So we at all times say our firm’s been round for 230-plus years, we have been by numerous elections, and our job is simply to handle by them.”
Bank of America is the second-largest financial institution in America with a market capitalisation of practically $300bn (making it roughly 10 instances larger than Barclays, Lloyds and NatWest, and greater than 3 times larger than HSBC).
It has about 5,000 workers within the UK, primarily in London but additionally Chester and Bromley.
Mr Moynihan – one of many longest-serving Wall Street chief executives – has been main Bank of America since 2010 over which era the share worth has returned 175%.
He addressed the very troublesome financial problem that the brand new UK prime minister faces, however was not too upset on the prospect of the UK company tax charge rising as a substitute of falling, as had been deliberate by Rishi Sunak’s predecessor Liz Truss.
“I think governments have to get a balance between taxation of corporations, individuals and what they spend the money on – and that’s a long-term problem for all governments,” he stated.
“People shouldn’t be bidding for people’s business on tax rates, because ultimately, that leads to things which get a little out of skew.
“So I feel the secret’s to have a constant charge the place folks can make investments throughout lengthy intervals of time, that is truthful to the businesses and truthful to the folks they make use of and truthful to the enterprise they generate, and tax revenues they generate, after which additionally truthful to the residents, so the governments can do what they should do.
“I think those things settle over time, they go up and they go down.
“And you realize, we do not reside or die by our tax charge, we reside or die by having nice prospects doing nice issues with them – generate numerous income, preserve bills in test, generate numerous pre-tax revenue, after which we’ll work out what the taxing authorities do.”
Corporation tax in the United States is 21% (with some surcharges depending state), which was lowered by president Donald Trump from 35% in 2018.
President Joe Biden has suggested it should rise again to 28%.
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The UK corporation tax rate is currently 19% and due to rise to 25% by April 2023 – a rise that Ms Truss planned to cancel, but now looks set to remain in place.
Mr Moynihan was sober about the global economic outlook, saying: “Our economists, and most economists all over the world predict recessions in numerous economies over the subsequent 12 to 18 months.”
That said, he felt the US economy was looking resilient.
“The US economic system on the finish of the day, it is a consumer-driven economic system.
“We see our consumers even for the first three weeks of October, they’re now spending still 9%-plus over what they spent last year, which is one-and-a-half times to two times the rate they’re spending pre pandemic.
“And in order that’s a great factor.
“Now, ahead of them, you know, we’ve got the Fed raising rates and slowing down the economy.
“At the top of day, [US consumers] have good credit score statistics and have the flexibility to borrow, in order that’s excellent news.”
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Mr Moynihan was brought in to lead Bank of America after the financial crisis, and is always on the lookout for the next potential issue for his company and his industry, particularly following the UK’s recent issue with certain pension funds having too much exposure to Liability Driven Investments (LDI’s).
“We at all times search for, if you consider the Princess and the Pea analogy, below all these mattresses, you are at all times in search of that pea to determine the place the chance is and the place the chance will get bottled up.
“And you saw some that come out when you had a particularly strong movement in gilts, in the bonds in the UK.
“But the market now loves stability…and also you’re seeing it settle again down given the circumstances over the previous few weeks. But yeah, that was attention-grabbing. We seemed round and stated: Where else may this infect the economic system?
“But the good news is the banking systems across the world are in pretty good shape.”
Source: information.sky.com”