BofA: We’re Smarter Than JPMorgan, You Know

Bank of America (NYSE:BAC) said a trading fiasco like the one at JPMorgan (NYSE:JPM) was not likely with its investments because the firm was “very comfortable” with the composition of its portfolio and did not use “macro positions” to hedge.

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Bank of America chief executive officer Brian Moynihan was asked at an investor conference on Monday about his firm’s investments following JPMorgan’s disclosure earlier this month that it lost at least $2 billion on a trading strategy by its investment office.

Moynihan said the bank bought insurance-like protection on some loans to large companies, but did not make broader credit hedging bets at the corporate level. He added that nearly 90 percent of the firm’s money was invested in government-guaranteed mortgage-backed securities or treasuries.

The chief executive also insisted that the bank was not “too big to manage” anymore because of streamlining processes that have brought down its nearly $2.37 trillion in assets in 2010 to $2.18 trillion now.

“It’s a narrower business,” he said. “It’s a safer enterprise.”

Big investment institutions including Bank of America, JPMorgan, Morgan Stanley (NYSE:MS), Citibank (NYSE:C), and Goldman Sachs (NYSE:GS) are facing potential downgrades on their credit ratings.

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