Bank of America Corp. Chief Executive Brian Moynihan sent a letter to the firm’s employees on Monday night in an effort to calm them following the firm’s 20% stock plummet that day.
“Our course is set, and we know our destination,” Moynihan said in the letter. A Bank of America spokesperson confirmed the letter’s contents on Tuesday, which was first reported by the Associated Press. The letter was originally posted on Bank of America’s internal website.
“The management team and I understand that this is an unsettling time not just for our shareholders, but also for all our teammates across our company,” Moynihan said in the letter.
Bank of America’s stock dipped on Monday following reports that one of its hedge fund investors sold half its ownership in the firm and American International Group Inc. sued the firm for $10 billion in damages related to mortgage-backed securities losses.
The firm’s stock recovered somewhat on Tuesday, closing at $7.60 per share.
Moynihan said in the letter he did not know how long the market uncertainty would last, while expressing confidence in the firm’s ability to weather the storm. He also expressed dissatisfaction with political leaders, particularly in the U.S., who were involved in the debt ceiling deal that ultimately contributed to Standard & Poor’s downgrade of U.S. Treasury debt.
“Many economic issues are contributing to uncertainty in the markets, but one important factor is the effort of policy leaders around the world, and especially here in the U.S., to reduce sovereign budget deficits and overall debt,” Moynihan said.
The letter is part of an aggressive reaction Bank of America has taken to this week’s events, moving to restore confidence both with its employees and its investor clients. A video aiming to explain the consequences of the market volatility for investors was also posted on its Merrill Lynch brokerage’s site this week.
“Worries are growing that the U.S. economy is heading back into recession,” Bank of America Merrill Lynch President of Global Wealth and Investment Management Sallie Krawcheck said in the video. “Without a doubt, these are challenging, perhaps unprecedented, times.”