Bank of America 2008 Annual Report Download - page 10

that we support the communities on
which our future prosperity depends.
Supporting the U.S. economy
Throughout 2008, we operated with a
strong belief that what is good for our
communities and our country is also
good for our company — and vice versa.
Although every headline is telling us
that banks aren’t lending, we extended
more than $600 billion in new credit
during 2008 to consumers, small
businesses and large corporations.
Obviously, lending volume is not what it
was at the height of the boom. And it
shouldn’t be. We’re in a recession, which
means that demand for credit is lower,
and credit standards are tighter. But that
doesn’t mean “banks aren’t lending.” In
fact, we’re out there in the marketplace
making every good loan we can, growing
our relationships with existing customers
and creating new ones.
We also have been a leader in fore-
closure mitigation and loan modifica-
tions, as we work to help individuals
and families stay in their homes. In
2008, Bank of America and Country-
wide modified approximately 230,000
home loans to avoid foreclosures,
representing approximately $44 billion
in mortgage financing. And we have
committed to offer loan modifications
for as many as 630,000 customers,
representing up to $100 billion in
financing. To help people keep their
savings secure, we’ve opened
millions of retirement accounts,
CDs and savings accounts.
All these activities are helping to
provide support to the economy as
we work our way toward recovery.
They also are helping Bank of America
increase our market share across all
our businesses, create relationships
with new customers, and strengthen
the loyalty of longtime customers.
We are taking action to grow our
business — and we are doing our
part to support our customers, ease
the credit crunch and stimulate the
economy at the same time.
How we got here — and
where we’re going
The financial services industry has
undergone transformative, wrenching
change over the past 18 months. In the
blink of an eye, we’ve seen the demise
of the independent investment banking
business model on Wall Street; the
failure or acquisition of many of the
largest thrifts and mortgage lenders
in the country; and, to a great extent,
the disappearance of some parts of
the securitization industry for what
has now been more than a year.
The industry that emerges from this
crisis will look much different. It will
have accelerated toward the “barbell”
we’ve been predicting for years: a
handful of very large, diversified, global
firms on one end, and thousands
of small, local community banks on
the other. Credit markets will feature
simpler, more transparent products.
We will be a smaller industry, with
fewer overall employees, and claiming
a smaller portion of national income
and gross national product. And regula-
tion and oversight of the industry will
be tighter and more conservative,
especially in sectors of the industry
that were lightly regulated before (e.g.,
mortgage lending, hedge funds, credit
markets, non-bank consumer finance).
The story of how we got here is the
story of every great economic bubble
in history. Every group of participants
in the economy — lenders, borrowers,
regulators, policy makers, appraisers,
rating agencies, investors, investment
bankers — had a motive to push
the cycle forward, and most did. The
institutions that gave in completely to
the frenzy around them, and engaged
in the worst lending practices, are no
longer with us. Those that balanced
the need to compete with the need to
maintain prudent lending standards
— like Bank of America — survive
today, and have provided a stabilizing
effect in an otherwise unstable
financial services industry.
One of the greatest challenges our
Total
Assets
’06 ’07 ’08
In billions, at year e nd
$1,460
$1,716 $1,818
8 Bank of America 2008