David i dont consider myself a journalist. And nobody else would consider myself a journalist. I began to take on the life of being an interviewer even though i have a day job of running a private equity firm. How do you define leadership . What is it that makes somebody tick . Lets talk about your career at bank of america, and how you rose up and actually became the ceo, because i think it is quite interesting. To go to your background, you are from ohio. Your father was a chemist . Brian my father was a chemist, yeah. David for dupont . Brian yeah. David you were sixth of eight children. I guess you share a lot. Brian you have to be aggressive with stuff, at least getting your share. Lets say that. David ok. You went to brown university. And you were the cocaptain of the rugby team. Brian right. David rugby is a tough sport. I assume that is not as tough as banking. Or is banking tougher than rugby . Brian there is nothing more powerful to see one of those scrums push, but i was never in there and that was one of the rules are played on the team. It is a fantastic teamwork game. You want the game where all 15 players participate fully. David ever break any bones . Brian i got knocked out once by my own teammate, which irritated me, because i was about to score. The guy kicked me in the head on the way to the goal. David ok. You graduated and went to law school at notre dame. Brian correct. I played rugby there. David where were you more of a star at notre dame or at brown . Brian i dont know, but we had fun at notre dame. David you went to rhode island to practice law. You were a corporate lawyer . Brian corporate securities, m a, private equity deals. David the highest calling of mankind, private equity. [laughter] brian one of the reasons why i quit being a lawyer was i had worked with our private equity firm, the Company Called fleet equity. I structured deals with them. That is what led to the ceo at the time saying come work with us and quit being a lawyer, and i went to work with them. David and fleet was an and did ae bank, merger with bank boston. You stayed with the combined company. Acquisitive bank, and did a merger with bank boston. You stayed with the combined company. Then when the ceo of bank boston took over, chad gifford, took over, he decided the combined bank wasnt big enough, so he ultimately discussed selling it to a number of other people. Ultimately it was bought by bank of america. Brian right. That goes to the scale of banking and what you can achieve. It was ultimately the First Nationwide bank, and that is something that we have that no one else has right now. David when bank of america came in, what was your job in the new bank company . Brian the Wealth Management business, columbia asset management, private business. David for a while, you became the general counsel of bank of america. Brian for 40 days. David 40 days. Brian december of 2008 to january of 2009. 40 days 40vid 40 days and nights, was there any flooding or anything . [laughter] brian there was a transaction and if you other things in the second round of tarp and a few other gems. David by that time, the u. S. Was in the middle of a financial crisis. All banks were in trouble. I think that is fair to say. Bank of america was doing a favor for the u. S. Government when it was told it should buy merrill lynch, is that right . Brian there was a scramble to try to stabilize the firms that were less stable, jp morgan, bear stearns, ourselves, and we couldnt stabilize, lehman brothers. We even looked at it as a company. David at one point, the ceo of bank of america was leaving, and they needed a new ceo. How did they pick you . You were the general counsel. Brian at that time, i wasnt. I was general counsel for a short period of time. After that, i had a run in the commercial banking business and Investment Banking business. I couldnt keep a job, lets just say that. I had probably five jobs in one year. Largely, we were doing deals and things were shifting around and it was interesting. The late summer, early fall of 2009, the ceo told the board he wanted to leave at year end. They went through a search process. It was something i told our board i will never leave you in the position to have to do. So i owe them a successor at all es, not only now but sometime in the future. It was a relatively difficult process for all involved. In middecember, they finally concluded i would be ceo, and i have been ceo since. David since you have been running it for 10 years, market capitalization is up 54 , stock price is up about 76 . What did you do that made these events happen and make bank of america Largest Consumer bank in the United States . Brian it was a fairly straightforward thing, and there were additives that made it more interesting, but basically, to pare the company back to what made it great. What makes it great is the lines of business. Andy cipla city and the simple a city between that. We got rid of 40 different units we didnt need. We got out of businesses like outside of the United States wealth businesses which we did not make any money on. What made it more interesting is that the defaults and mortgages kept building. So, taking care of that issue was unique. The question was you had to take that stuff and get it away. The vision was to have everything a customer, company, or Institutional Investor needs, but keep it to that. And not get into stray business. We had 70 billion of funded private Equity Investments when i took over, and now we have less than 1 billion. David you cant have too many funded private equities. Brian that is your business. Our job is to help you do it, not to be competitive. Those were major changes. David before you were the ceo, the bank made an investment in countrywide, and then they made an acquisition of countrywide, and ultimately, it turned out to cost the bank maybe 50 billion or Something Like that. So maybe one of the worst acquisitions in the Financial Services world for quite some time. They got in trouble free wide because of subprime mortgages. Are you making a lot of subprime mortgages today . Is the bank doing that . Brian what we were, we were 20 of the mortgage market, and 15 was done through other people. Brokers and correspondence. Best correspondents. Correspondents. We dont do that anymore. The only way a person gets a mortgage at bank of america is by sitting with a teammate or directly from us. We dont buy mortgages from other people. That has left us with 5 of the market. It is a much more stable environment. David today, the banks future looks very strong. But at one point during the crisis, the bank needed more money and you had to call a man named warren buffett. Was that easy to make that call . Did he say any terms you want is fine . How did that work . Brian warren called us. David oh, he did . Brian this story i have heard from warren. But he called and got into the call centers and asked to speak to me. They dont transfer anybody to the ceo that call into a call center. So he found an investment banker. They worked with the cfo and they called and i talked to him. He basically said i want to make an investment in the company. I said we dont need the capital. He said, i know that is why i am calling. You needs stability, and the capital will do you good. That was in 2011 when the world was kind of interesting. Remember, the government was almost going to default. You had real uncertainty about the litigation risk around the mortgage industry. He put the money in. From that day forward, he put the money in. It was the smartest investment in the world, 5 billion overnight in the company. He literally called me and i talked to him the first time on monday at 11 00, and we had the agreement signed on tuesday and the money by thursday. He does that. So, we took the interesting thing is you if are a common shareholder that day, you would have had fared as strong as he did. He had 5 billion at a time others didnt have it. David he bought the stock was less than half of where it was now. I assume. Brian yeah, his Conversion Price was like 15 to 20 . David if i had some extra money today and wanted to buy stock in the bank, should i buy your bank stock and at bank of america and would i do well . Brian you would do well. You would do well. We have the best franchise across all the businesses in the all the businesses, and the largest economy in the world. We have two or three franchises daily with global companies. What more do you want as investors . David do you think doddfrank legislation is working or would you modify it . Brian capital liquidity, stress tests, those regimes are critical. The reason why the u. S. Bank is strong and active and growing. David during the Great Recession, you spent a lot of time in washington, more than you probably wanted to. And, you very often testified and so forth. Do you think that attitude today in washington towards banks is more favorable than it was when the Great Recession was going on . Brian i think the attitude towards banks in general is more favorable because the economy is growing, unemployment is low. That is a better backdrop then than severe delinquency in homes in housings and foreclosures going on and the unemployment at 10 . Our Customer Service scores are at an alltime high. Our growth is exceeding the industry. Those are all very good things for our company. But that was built through a lot of tactics we took. The general atmosphere is better, largely because people see we are trying to help. David i think it is fair to say that the banks were beaten up by the regulators and congress and the doddfrank legislation was passed. Do you think the doddfrank legislation is working, or would you modify it . Brian the Banking Industry selfinsures itself. If you are an insured institution with insured deposits, it is a cooperative. When the bank fails, we paid 15 of it. We have a high interest in a safe industry. What happens at times, you see the activity leak outside the industry. That is what the problem was. Most of the major issues were companies that werent covered by the core regulatory umbrella. Doddfrank changed that. That was a good thing. Now they have purview over the whole industry. We still struggle. Half the Mortgage Business is not in the Banking System today. When it wasnt before, that gave rise to countrywide and others when it wasnt. Overall, doddfrank has corrected a lot of the issues. The question is, underneath it, there are pieces like the volcker rule that swung in a direction where you say i dont think that is what we are trying to do. We are trying to get them more rational. Both, the capital, liquidity, stress tests, those regimes are critical. The reason why that u. S. Banking system is strong and active and growing and supporting the economy, and other Banking Systems are not, is because we got to it. David there are four big banks, banks in the United States, citicorp, jp morgan, wells fargo, and bank of america. Do you think thats a good thing to have only four big banks that are based in the United States, or is it working ok . Brian i think it works well. A large amount of the industry is in the hands of 5000 banks, so you have much more varied financial industry. One thing that makes our industry strong is the variety. The variety of participants. We have the largest market share along with those colleagues. If you look at us as a percentage of gdp, relative to other countries, this is completely on solid dated business. We have the largest retail share, about 15 . If we were cocacola or pepsi, we would think that is not very good market share. So there is a lot of room to go to grow. David what percentage of profits or revenues are from outside the u. S. . Is it a large percentage . Brian about 15 to 20 . David are you reasonably happy with that . Do you think that is where expansion can come . Brian we are expanding outside havenited states, so we services doing Capital Trading for big firms in other ampanies, and then we have company that does corporate and commercial banking and Investment Banking and Treasury Services around the world. We are investing in those by adding people. It doesnt mean acquisitions, just adding more and more people with opportunities in asia, latin america, middle east, europe, etc. We can grow, because, basically, the connectivity of the Largest Companies and midsized u. S. Companies, which we are the largest provider of services to around the world, it needs people like us, and we are happy to do it to help them transact, engage in trade, import, export, and all of that stuff. It is a great business. David in the old days, 20 years ago or so, if i wanted cash i would take out my checkbook, go to my bank, write out a check, and they would probably cash it to make sure i have enough money in the account. Do you really need banks, physical banks these days . How many people walk in and cash checks that way . Brian the numbers are surprising. We have 4300 branches today. David 4300. Brian at the highest point, we were probably 6100. Today, you have to be high touch in hightech. In those branches, about 800,000 people come in and transact. But during the course of the last quarter, second quarter, i think we had 1. 4 billion consumer actions and 1. 3 billion or digital. David people my age and my color hair, are they the ones going into the banking branches, and are the people doing Online Banking mostly younger, by a lot . Brian i would say a decade ago, the cohort wouldve been age determinant. Now it is not. Now, we had a 100yearold person sign up for mobile banking. David do you get a discount if youre 100 years old . Brian its free. Its hard to give it away. We do a great job with millennials. We open accounts at twice the rate as the other population, but on the other hand population, so we are gaining the share of millennials, but we also hold a lot of money and transact with people our age. David the most common dollar currency you use, the 100 bill . Is that the most frequent . Brian the 20 bill. David what about cryptocurrencies . Are you a believer that they will replace u. S. Dollar currencies or supplement them . Brian if you separate the two different thought processes, one is the moving money digitally. 55 of payments by consumers moves digitally today. The u. S. Is still a cash society. What youre trying to do is move paper and current currency out. An anonymous currency is a separate question. That doesnt work so well, but the idea of digitizing cash. We spent about 5 billion in cash, coin, and currency around the company. There is no one more highly interested in that. We are driving that now. Americans still use it. It is just americans dont use it. David i read that another bank in the United States, jp morgan, you have heard of them . Brian yep. David they were thinking of having their own cryptocurrency. Is that true . Are you going to do something similar . Brian blockchain is the connection between them. We have 45 patents on blockchain, and another in the 45 process. We believe in the technology as a way to move money and uses around trade. We use a lot of information and money at the same time and documents. Those are good uses for right. I dont know if i would call that a cryptocurrency. It is still u. S. Dollars from a fiat currency distributed electronically. That is going to happen. David if i am a College Student watching this discussion and im getting ready for a bank of america interview, what should i do . I should dress appropriately, right . Brian make sure you demonstrate curiosity and make sure that you demonstrate that you really want to help people. David i dont think the people watching this show are generally bank robbers, but for those bank robbers who might have tuned in, is it easy to go to a bank today put up a gun, and get some cash out and escape or is it harder than ever . Brian it is harder than ever. David because . [laughter] brian because it is not a very fruitful exercise. David are people still doing that . Brian it doesnt happen often. It still happens. You catch the people. Thats the deterrent. Our teammates, once i went we have cameras that work all around the firm. The branches record things. I went to go see it. They were going to show me what a bank robbery looked like and there was a live robbery at that time. There is nothing worse than seeing someone pull out a gun and point it at one of your teammates. We do everything we can to make ourselves less attractive to that activity. And the teams do a good job. David you have used the word teammate a few times. Its a teammate like an employee, a colleague . Why do you use the word teammate . Brian because we are in competition to beat the crap out of everyone else, and that is what teammates do. David how is the diversity among your teammates . Brian we are half men, half women. David minorities . Brian representative of population levels and ethnic breakdowns. Weve got work to do in terms of sonority and some of the traditional Financial Advisor work, in terms of women. We have areas we need to work on. We know those. We are driving at them but we measure it carefully. Six Board Members are women and have my manager team is women. So from top to bottom david half of your Management Team is women . Brian yes. David are they better than men . Brian i think you would have to ask them. David today, if i wanted to graduate from college and get a good job, why should i want to go to a bank . Is a bank a good career . Do you think young people are coming in in greater numbers or lesser numbers to banks . Brian we bring in, you know, into the core training program, we have 1400 for the summer, and we hire about 1000 per year, just in the commercial and as corporate banking. You get more broadly in the company, we hire 4500 recent College Graduates a year in the branch system. There is no doubt people want to work for us. It is a great career. It is a chance to help people you know, people come to work for a company because they want to help. David you have three children. Do you recommend Banking Services to your own children . Brian two of them work in finance. And they like it. One has been in for five years, the other, three. They work at competitors because they cant work for our company. They like it. David if i am a College Student watching this discussion and getting ready for a bank of america interview, what should i do . I should dress appropriately, right . Cut my hair maybe . Brian in my mind, it is the same thing. Make sure you demonstrate curiosity, and make sure you demonstrate that you really want to help people. David bank of america has a large charitable undertaking, and you have a goodsized team doing it. What are your areas of focus and how important is that to bank of america . Brian there is the charity we have and it is at 250 million a year of giving. There is community development, low and moderate Income Development work which is about 4. 5 billion for housing and development. Then, there is a volunteer, which is 2 million hours on top of that. Then there is Employee Giving on top of that. So you are working all these things. So the areas we work are largely around Economic Development develop mental work. We have a commitment we just renewed. We have done 125 billion so far. David some people say ceos because of their prominence, should take more public positions on issues of Public Policy. Do you agree with that or do you try to stay out of Public Policy or public controversy . Brian i think there are two parts to that question. We firmly believe that we have to both create profits and returns for shareholders and we have to deliver what society needs. As a bank, we are only going to be successful if society is successful. Our decision about guns and things like that, which we made two years ago now, a year and a half ago, whatever it was, was driven by the fact that we had well over 100 people in the venues where these horrible tragedies were taking place inside the pulse nightclub, las , las vegas. So the teammates are saying you we need to do something here. David what are the leadership secrets . Is it hard work, intelligence, luck, persistence . What is it that you would say enabled you to rise to the top and what would enable someone looking at you as a role model to say this is what i did to get where i am . Brian it is all those things. Ill let the intelligence be decided by other people. It is all those things. You have to work hard. You have to find out what is important to the company. You have to be successful in areas that have impact. But, the number one thing when i talk to young teammates is be curious and keep learning. David you have been the ceo of almost america, roughly, 10 years now. At some point would you like to come to washington and be the secretary of the treasury, chairman of the federal reserve, member of congress or some other position in government . Brian i think i have had the honor of having one of the best jobs you can have. I am completely happy, and i am happy to do it as long as the board will have me. David if the president called you someday and said, the country needs you to be secretary, chairman of the fed, you would say . Brian call mr. Rubenstein. [laughter] david i think that call is unlikely to happen. Francine welcome to bloomberg etf iq europe. Over the next 30 minutes, we will be your guide to the market 1 trillion one trillion youre a market in Exchange Traded funds. Everything you need to know market in Exchange Traded funds. Everything you need to know about the funds. Francine back in the game. 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