[quote=flu]
WASHINGTON (AP) — Congressional investigators say they have seen internal documents that prove the Federal Reserve threatened to force the ouster of Bank of America CEO Kenneth Lewis if he didn’t follow through with plans to buy Merrill Lynch & Co.
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While I don’t support the Federal Reserve threatening bank CEOs as these emails imply… all Ken Lewis had to do was say, “No. I don’t like the deal. Fire me.”
But, alas, he apparently was more concerned about losing his job than about protecting shareholder interests. In my view, for this reason alone he should be fired. How, after all, did he manage to put the bank into a position where the Fed could strong arm him? That’s HIS (and the directors’) fault.
Here’s the bottom line, folks – and something that most bankers forget: When you accept FDIC insurance, as all banks do, the US Government is a major partner in your enterprise. If you’re uncomfortable with that, you need to find another line of work.
Ken Lewis put both his bank and his career into perilous positions in which he was susceptible to strong-arm tactics on behalf of one of his business partners (The Fed). And instead of falling on his sword, he chose to follow the keep-my-job-at-all-costs route and screw his shareholders.
Again, I’m not crazy about the Fed’s tactics in this case. But the REAL villain in this situation isn’t the Fed – it’s just a not-for-profit partner in BofA. The real villain is Ken Lewis.
