Bank of America may be looking to drop longtime CEO Brian Moynihan

Bank of America's Performance and Leadership - Bank of America's earnings fell less than expected, leading to a positive market reaction and stock price increase [1] - CEO Brian Moynihan has been with the company for 15 years, and there is a consensus among analysts and investors to let him continue for five more years [1] - Moynihan's management style is described as plodding and risk-averse, particularly in supporting big corporate clients and banking deals [2] - This risk aversion is cited as a key reason for Bank of America's underperformance in investment banking compared to competitors like Goldman Sachs and JPMorgan [2] - Over the past five years, Bank of America's shares have lagged behind those of JPMorgan and Goldman Sachs in a bull market for finance stocks [2] Trading and Risk Management - Bank of America's trading desk has not reported a loss in years, but this conservative approach is seen as a disadvantage in attracting high-value banking clients [3] - Since the 2008 financial crisis, trading risk has been stigmatized, and regulatory changes have made it difficult to engage in large proprietary trades [3] - The financial crisis was partly caused by banks holding risky mortgage-backed securities, which led to balance sheet issues across the financial system [4] - Bank of America was significantly impacted by the crisis, leading to the ousting of former CEO Ken Lewis and the appointment of Moynihan to clean up the situation [4] - Moynihan has successfully stabilized the company, including securing a strategic investment from Warren Buffett, and the stock has recovered from post-crisis lows [4] Current Challenges and Strategic Concerns - Internal critics argue that the company's $3 trillion balance sheet is not being used effectively to support customer trades, which is costing the firm high-end clients [5] - Regulators are now less concerned with trading risks, and this is seen as an opportunity for banks to take calculated risks to support clients [5] - Despite 10 consecutive quarters of revenue growth in sales and trading, Moynihan's risk aversion is seen as benefiting competitors like Goldman Sachs and JPMorgan [5] - There is speculation that Warren Buffett's recent reduction in his stake in Bank of America could lead to pressure for Moynihan to retire earlier than planned [6]