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B of A's Lewis: Actually, Taking Public Money Was A Mistake
Ken Lewis, the embattled Bank of America CEO, has told the Financial Times that taking $20 billion of government money to help it digest Merrill Lynch's losses was a "tactical mistake."
Lewis told the paper that the move made B of A appear as weak as Citigroup.
He also said that he intended to stay on atop B of A until the firm had paid the government back the $45 billion in total it has received from taxpayers, saying that could happen in 2-3 years.
Lewis has seen calls for his resignation over the mishandled Merrill merger. Merrill's massive losses in the fourth quarter of 2008 forced B of A to go to the federal government for help. Merrill's billion-dollar bonus awards, which are currently being probed by New York Attorney General Andrew Cuomo, have not helped the situation. Lewis recently stayed mum when questioned by Cuomo's investigators about what he knew about the bonuses.
Josh
Zachary
He also said that he intended to stay on atop B of A until the firm had paid the government back the $45 billion in total it has received from taxpayers, saying that could happen in 2-3 years.
I suspect it merely slipped Mr. Lewis' mind to mention anything about a golden parachute on the horizon. I suspect this is analogous to Wolfowitz taking a principled stand and refusing to step down from the World Bank ... until his $400,000 automatic performance bonus materialized.
March 2, 2009 6:08 PM | Reply | Permalink
Wasn't eventually paying back the money part of the original bailout plan?
March 2, 2009 6:11 PM | Reply | Permalink
For the sake of the memory of A. P. Giannini, let it be remembered that "Bank of America" is now only a name, and the corporation is really Nationsbank -- whatever in the hell that was -- that sucked up Bank of America and figured, rightly, that B of A was a better name.
March 2, 2009 8:29 PM | Reply | Permalink
The odds of B of A going into receivership may have gone up significantly. Everybody knows that the money to pay back the federal government isn't going to be there any time soon (hint: payback requires the company's balance sheet to be at least $50 billion better than it is today), and Lewis has just signalled that he intends to stay until hell freezes over, or the board gives him a bailout package that he likes.
But no board of directors is going to give anybody an eight-figure buyout a) in the current political and economic climate and b) when it's not clear that the company is solvent at all, and the feds are looking carefully at the books.
Hence, stalemate.
March 2, 2009 9:32 PM | Reply | Permalink
"Mistakes were made. It's OK now. We're not weak like Citigroup. We really don't need the money."
Right. This is a patently transparent public relations ploy. Lewis seeks to prop up stock prices & at the same time keep his job.
-AF
Andrew Sullivan Is A Fraud
March 2, 2009 11:37 PM | Reply | Permalink
Ken Lewis is not the astute CEO as sometimes believed. His acquisitions of Countrywide and Merrill, plus the acquisition of Fleet Financial have resulted in the firm being insolvent.At $4.00/share the value of the firm is around $30 billion, and the conventional wisdom on Wall Street is that it would take that much more to keep the firm in operation. It does not help to see Lewis alighting from a corporate jet during these lean times, nor hear him misrepresent his role in the awarding of bonuses by Merrill to its brokers of over $3 billion(of taxpayer money). He should be fired with no parachute and be thrown into a garbage heap with the other Wall Street crooks who have brought our economic system to ruin.
March 3, 2009 11:08 AM | Reply | Permalink
Question.
If taking the bailout money was such a mistake, is he planning on returning it to the government?
When you stop laughing...
.
March 3, 2009 3:55 PM | Reply | Permalink