Bank of America Corp.'s commercial customers are alreadyreacting to the “fiscal cliff” that looms over the U.S. budget byputting off purchases, Chief Executive Officer Brian T. Moynihansaid.

Businesses have held back on buying capital goods until theoutcome of negotiations in Washington becomes clear, Moynihan saidtoday at a New York investor conference sponsored by Bank ofAmerica. Tax increases and spending cuts could equal 4 percent ofgross domestic product, he said.

“The impacts of the potential cliff are already being felt,”Moynihan said. In the bank's survey of chief financial officers,“the number one issue they see is the fiscal cliff. They tell usit's affecting their business plan. That uncertainty continues tohold back the recovery. Simply put, our clients tell us they willnot be aggressive in times of uncertainty.”

Moynihan, 53, is trimming staff and operations to reduce costsafter revenue was “regulated away” by legislation affectingconsumer accounts, cards and trading at investment banks, he said.The company sold more than $60 billion in assets through 30 dealssince he took over as CEO in 2010 to streamline the firm and buildcapital.

Goldman Sachs

The Standard & Poor's 500 Index had its biggest weeklydecline since June after President Barack Obama's re-election setup a budget showdown with the Republican-controlled House ofRepresentatives. Market swings may continue until the sides agreeto a solution, Goldman Sachs Group Inc. CEO Lloyd C. Blankfein saidtoday at the conference.

“Whether or not it gets resolved — which I believe it will —we're going to have uncertain moments and insecurity between nowand then, which will roil the markets,” Blankfein said. “My bestguess — it might not turn out this way — but we are at least bracedfor a ride here.”

Goldman Sachs is the fifth-biggest U.S. bank by assets and isbased in New York. Moynihan's company ranks second and is based inCharlotte, North Carolina. Bank of America's Tier 1 common capitalratio under the latest rules rose to 9 percent in the third quarterfrom 8 percent a year earlier.

“We've gone from lagging the industry to leading the industry,”Moynihan said.

Macroeconomic signals are mixed and unemployment remains higheven with the most recent improvement, he said. Profit margins onloans are still under pressure, “economic activity is sluggish andloan growth remains sluggish behind prior-period recoveries,”Moynihan said. The bank is forecasting annualized economic growthof about 1 percent this quarter, he said.

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