With President Obama starting to apply his mantra of "change" to General Motors Corp. today as he sends CEO Rick Wagoner
driving off into the sunset and denies carmakers more Troubled Asset Relief Program money, the CEOs of the big banks are likely to be wondering if the administration's new tougher stand on bailouts is going to spill over in their neck of the woods.
The Bush administration replaced the heads of American International Group Inc., Fannie Mae and Freddie Mac when it took over those institutions, but Wagoner is the first CEO the Obama administration has demanded a resignation of in its short ten weeks since in the White House.
The early days of the credit crisis claimed many chieftains at the banks including Bear Stearns' James Cayne and Merrill Lynch's Stanley O'Neal. However since then the boards of the banks have been willing to live with their top management in the face of staggering losses.
Among those who might find themselves on the hot seat if they need more aid are the usual suspects, with Citigroup Inc.'s Vikram Pandit and Bank of America Corp.'s Ken Lewis topping the list; while CEOs at stronger banks such as Jamie Dimon of JPMorgan Chase & Co. and John Stumpf of Wells Fargo & Co. don't have much to worry about. In spite of the turmoil at their banks Pandit and Lewis don't appear to be in any danger from their boards though, but either one could find themselves making the case to keep their job should another surprisingly large loss force another bailout of their bank.
The Wagoner move is also likely to figure in the calculations of bank CEOs as they consider if and how to participate in Treasury Geithner's
Public-Private Investment Plan to get toxic assets off their books. -
George WhiteSee Deal Pipeline story on WagonerSee Dealscape post on PPIP
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Too much power in too few hands; we need to break up the banks now. There are rallies being organized as we speak in cities around the country for April 11, 2009. Visit "A New Way Forward" at www.anewwayforward.org to find out about protests being planned in your state.