Wagoner’s ouster sends message to banks
A key lobbyist for the banking industry said the U.S. government’s move to replace General Motors Corp.’s top executive raised a red flag for bankers.
After the government forced GM’s Chairman and Chief Executive Officer Richard Wagoner out of his job Monday,
is their a heightened risk for the Obama administration, to replace other executives at financial firms that have received bailout loans? Scott Talbott at the Financial Services Roundtable asked.
I think you’d have to conclude that the answer is ‘yes,’ he told The Washington Post.
One unnamed bank executive told the Post that the stress test the U.S. Treasury is conducting for large banks could end up with the administration removing executives at banks that
fail the test.
But, bank analyst Bert Ely, said financial viability separated the banks and the auto companies.
There is a key difference between GM and Chrysler and the large banks, he said.
Those two companies have major questions about their profitability. Whereas the large banks by and large have good business models going forward.
The problem is that they’ve got to pay for the sins of the past, Ely said to the Post.