New Bank of America (NYSE:BAC) CEO Brian Moynihan Says Execution Key to Turning Things Around at Banking Giant

Incoming Bank of America (NYSE:BAC) CEO Brian Moynihan says the key the the company turning things around and improving is to focus on execution. Moynihan was referring to execution in relationship to their consumer and business customers, of whom he said, “When we use the word execution, we mean key things that face our customers.”

He’s talking about the ongoing challenge of helping their 50 million plus combined consumers and businesses they serve, which are experiencing economic hardship in a variety of ways.

While this sounds good, you have to have a plan to execute as well as the economic conditions to do that as well. For example, there’s nothing Bank of America or Moynihan can do to change around unemployment or to get American consumers spending money again. If those two things don’t happen, execution won’t matter in my opinion, as they have to improve to justify the execution.

If consumers and businesses are extended credit but jobs remain scarce and people continue to hold onto their money, how will that credit be paid for? Of course the answer is it can’t, and it would make things worse rather than better, adding to the debt of companies and individuals, who would then be in a vicious circle they have no further way to escape.

That’s the challenge facing Brian Moynihan, Bank of America, and the other banks in America. Even though Obama has tried to pressure banks to lend, it’s a ridiculous idea to do that in the context of what I just said.

Lending can only be justified by consumers opening up their wallets and spending. If loans are made and that’s not happening, again, it doesn’t matter how well the execution is if the business or individual has no underlying resources to pay it back. Jobs and consumer spending are the only way that can happen, and in truth, that’s not happening at a sustainable level for issuing more loans at this time.

While doing everything they can to help their customers is a good goal, it has to be in the reality we live in, not the hopes something may turn around.

More important for Moynihan in the short term is to work on integrating the recent acquisitions of Countrywide Financial Corp. and Merrill Lynch, which are still big loose ends that need to be tied together more tightly. That is probably the key area Moynihan needs to focus on.

I understand why he said he’s focusing on execution concerning the customers of Bank of America (he had to say it), but the reality is there isn’t much he can do there until there is a real, sustainable economic recovery, and that isn’t even close to happening at this time, contrary to the official line of the Obama administration.