October 1, 2009

BOA’s Lewis may signal a turn in banking

Kenneth Lewis' resignation from the top job at Bank of America may signify a bubble has burst in large-scale U.S. banking, a finance professor said.

The resignation announced Wednesday, is not just the end of a CEO, this is the end of an era in American commercial banking, Tony Plath, a professor at the University of North Carolina, Charlotte, told The Washington Post.

The financial supermarket could die when Ken leaves, he said.

Lewis arrived at North Carolina National Bank in 1969, when it was a regional bank with ambition, the Post said. A series of acquisitions, including BankAmerica of San Francisco, created the largest retail broker, credit card company and mortgage lender in the country, the Post said.

The last acquisition, Merrill Lynch, was the straw that broke the camel's back. Bank of America is under investigation by the Securities and Exchange Commission, Congress and New York State for allegedly keeping secrets from shareholders.

The company and its executives still need to be held accountable, said Ohio Attorney General Richard Cordray, who is suing Bank of America for allegedly misleading its shareholders in the Merrill Lynch deal.