CHARLOTTE, N.C. (
Bank of America's
(BAC - Get Report)
board appears to be looking for a clone of current CEO Ken Lewis, in which case its timing is unfortunate.
Wall Street Journal
reported Wednesday that the
bank's board is rejecting the notion
that Bank of America ought to become less large and complex, along with CEO candidates who subscribe to it. The board has made no secret of this view, nor has Lewis.
They also have made it clear that they are uncomfortable with certain consumer protection laws that will cut into fee revenue, that they would like to begin paying back funds from the Troubled Asset Relief Program, that they would like to offer competitive pay packages to top talent, and that they believe Bank of America is the best banking franchise in the world, just the way it is.
Grow larger? Perhaps. Shrink? Not a chance.
The problem with the board and Lewis' attitude is not that they are necessarily wrong, but that they may not have a choice in these matters if regulators have anything to do with it. Fees will be cut and consumers will (supposedly) have better protections. The pay czar will crack the whip. Whatever its capital levels and desire, Bank of America isn't paying back TARP until the Treasury Department says so. And if lawmakers and regulators say it's too big to fail, then doggone it, Bank of America may have to scale down -- in business lines if not in footprint.
Taxpayers are angry and the government is making moves to mollify their screams. Whether the regulatory overhaul will achieve the Obama administration's desired goals won't be determined for quite some time. But from a banker's point of view, one thing is clear: Playing nice with Washington is the only way to succeed.