Sept 10 (Reuters) - Bank of America CEO Brian

Moynihan on Tuesday praised Warren Buffett as an investor in the

company, but said he has not asked the legendary investor about

recent moves that have reduced his Bank of America ( BAC ) stake.

"He has been a great investor for our company, stabilized

our company," Moynihan said about Buffett during an investor

conference in New York. "I don't know what exactly he is doing

because frankly we can't ask."

Buffett's Berkshire Hathaway ( BRK/A ), the biggest

shareholder in BofA, has been trimming its stake in the U.S.

lender, making total share sales since mid-July of nearly $7

billion.

Berkshire holds a stake in Bank of America ( BAC ) of about 11.1%,

according to LSEG data.

Moynihan said the market is absorbing Buffett's stock sale.

He also spoke about the proposed changes in capital

rules after the Federal Reserve's regulatory chief on

Tuesday outlined a plan to raise big bank capital by 9%,

significantly easing an earlier proposal after intense Wall

Street opposition.

Moynihan said the proposed changes are manageable for

Bank of America ( BAC ), and it will continue to buy back stock, but

cautioned that higher capital requirements for large banks could

reduce lending.

"If our capital goes up by 10%, it stops us from making

$160 billion (in) loans we would otherwise make. Those loans

would go to small businesses and middle-market companies at

competitive rates," he said.

Speaking about performance in the third quarter, he said

investment banking revenue could be around $1.2 billion, little

changed from $1.18 billion in the same quarter a year earlier.

Moynihan said middle-market investment banking -

transactions below $1 billion - has been growing at a strong

double-digit pace.

He said trading revenues will grow at a low-single-digit

pace in the third quarter.

Rival JPMorgan Chase ( JPM ) said trading revenue is

expected to be flat or rise 2% in the third quarter, while

Goldman Sachs' ( GS ) CEO on Monday said

the bank's trading revenue will probably slip 10%

in the quarter because of sluggish conditions last month.