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Kenneth Lewis, the bank's chairman, CEO and president, also showed little sympathy for the Detroit automakers' woes during his luncheon address to members of the Detroit Economic Club at Cobo Center.
"I think there is one too many" U.S. auto companies, he said. "I would support consolidation."
Lewis said he would favor a bailout only if the automakers provided a game plan detailing how they plan to be competitive against Japanese and German rivals.
Bank of America is Michigan's largest bank in terms of deposits, thanks to last year's acquisition of LaSalle Bank. The Charlotte, N.C.-based banking giant has been capitalizing on the financial crisis by buying Countrywide Financial, the nation's largest mortgage lender, and Merrill Lynch.
Lewis forecast that the Federal Reserve will lower interest rates by half a point at its next meeting. "The economy is going to worsen before it gets better," said the 40-year banking veteran.
But he doesn't expect the recession to last a long time, predicting that economic growth will resume in next year's second half.
Under the federal government's $700-billion financial rescue plan, Bank of America and Merrill Lynch obtained a total of $25 billion. Lewis said the bank intends to use all of this money to make loans.
Bank of America has said it is also working with thousands of customers around the country, including in Michigan, to modify the terms of their mortgage loans to prevent foreclosures.
Though many banking experts are worried about rising losses from credit card debt, Lewis said the problem won't cause as much damage as subprime mortgages and will be much more manageable. However, he warned that it's possible that the industry could see record losses in this area.
Contact KATHERINE YUNG at 313-222-8763 or kyung@freepress.com.
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