The U.S. economy has only a 25 percent chance of a double-dip recession, and only a major negative shock could cause such an event, Bank of America's investment banking chief said on Wednesday.
"We have a 25 percent chance of a double-dip recession," Thomas Montag, Bank of America Merrill Lynch's president of global banking and markets, said during a presentation to investors.
A double-dip recession would result only from "another outsize negative shock" to the economy, he said.
Montag's remarks referenced a Sept. 3 Merrill Lynch report from the firm's head of North America Economics, Ethan Harris.
"The slowdown in the job market and the coming fiscal tightening suggest weak growth is here to stay" in the United States, Harris wrote.
But "we still see only a 25 percent probability of an outright recession in the next year, which is slightly above the historical average," the report said.
Montag joined Merrill Lynch in 2008 after 22 years at Goldman Sachs Group Inc. He addressed investors and executives Wednesday at the beginning of Bank of America Merrill Lynch's annual Australia Investment Conference in New York.
Bank of America shares were up 1.6 percent at $13.42 in late-morning trading.
© 2012 Thomson/Reuters. All rights reserved.