Bank of America: CEO Defends Actions As Shares Sink

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Moynihan, asked in the teleconference about that possibility, said of the existing settlement, "We think it's fair for us and fair for them. We will let the courts decide."

That prospect, in turn, raised fears that the bank lacked the capital sufficient to deal with its manifold problems, which include the slowing of the U.S. economy.

Early in day analyst Meredith Whitney told CNBC that such financial giants as BofA, Citigroup and Morgan Stanley would be, for the next ten years, "Zombie Banks," meaning they will have too little net worth to function effectively. J.P. Morgan Chase CEO Jamie Dimon responded almost immediately, calling her remarks "hogwash."

Standard & Poor's, in a quarterly U.S. banking teleconference Tuesday, pronounced itself "more concerned" that the profits and credit quality not just of BofA but of U.S. banks in general would be depressed by a combination of sovereign debt issues, mortgage-related risk and the further slowing of the economy. The rating agency's base forecast for 2011 predicts a "moderate decline in revenues" but also a "modest rise" in banks' net income.

Moynihan today insisted BofA has no capital problem. The bank's capital levels he described as "among the highest they have ever been" and "more than sufficient to run the company."

Costs, meantime, have been reduced "by driving head-count down" and by the closing, in the second quarter, of 63 branches. He described BofA as being, today, in a much better position to weather a recession than it had been going into the last downturn.

Asked yesterday in a CNBC interview if he foresaw a double-dip recession, he said no: "We're not seeing it. People are still spending on their credit cards. The consumer is not slowing down as much as had been feared." He repeated that belief today.

He is also reaching out to his employees at the nation's largest consumer bank. In a letter, which was posted on Bank of America's internal website Monday night and obtained by the Associated Press, Moynihan said, "the management team and I understand that this is an unsettling time not just for our shareholders, but also for all of our teammates across our company...."

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