May 8--While disputing the methodology of the government's stress test, Bank of America Corp. on Thursday said it can meet regulators' requirement for a bigger capital cushion without tapping any new government money.

The Charlotte-based bank laid out a plan to accrue a $34 billion buffer against potential loan losses by issuing common stock, converting preferred shares held by private investors, selling off assets, such as its Columbia asset management business, and generating more profits.

Separately, the bank announced plans to improve its corporate governance after shareholders last week voted to strip chief executive Ken Lewis of his chairmanship. Lewis acknowledged the criticism he heard at the meeting was "humbling."

Bank of America, the nation's biggest bank by assets, needed the largest capital boost under the test of the nation's 19 biggest banks. In all, 10 banks, including San Francisco-based Wells Fargo, needed $75 billion in additional capital.

Thursday's announcement was the culmination of more than a month of examination of the banks' loan portfolios. Regulators wanted to make sure they had sufficient capital to absorb losses and continue lending even in much more adverse economic conditions.

In acknowledging the need to meet regulators' demands, Bank of America said the government overestimated the bank's potential losses and underestimated its potential earnings power. The government estimated Bank of America, which has total assets of $2.3 trillion, could sustain losses of $136.6 billion in 2009 and 2010 in a more severe downturn, but cautioned that number wasn't a projection but a "what-if" scenario.

"Frankly we think that scenario unlikely and looking like less and less of a possibility every day," Lewis said in a conference call with analysts, adding he believes the economy has hit bottom.

In comments in March, Lewis had said he expected his bank to pass the stress test and not to need any more capital. Asked about those predictions Thursday, he said he had couched his remarks to say the bank would pass by its own measures, but at some point it was in the "government's hands."

He also noted that the bank doesn't expect to need any more government capital beyond the $45 billion it has already received through the Troubled Asset Relief Program. Instead, the actions it plans to take will simply change the composition of its capital. Regulators want banks to hold more common equity, considered the first defense against losses.