Bank of America (BAC) CEO Ken Lewis expects few outright bank failures as a result of the ongoing credit crunch but sees a round of consolidation ahead. Or so he opined at NYU yesterday.
The logic: Losses are evenly spread out among the banks, instead of concentrated among a few big players, so we will “have more of the walking wounded.” These, in turn, will be snatched up by banks in stronger positions:
I expect geographic consolidation to continue, leading to stronger, more diverse and more efficient institutions…
Even as the industry adjusts to a more normal growth trend, a few institutions are very well positioned to win market share and will recover and grow faster than others…[those banks with] the size, scale, market diversity and ability to create value for customers and clients [will succeed]”
Lewis also said that stand-alone investment banks, like Bear Stearns (BSC) before its collapse, would become a “rarer breed.” He apparently had no comment on the billions of BOFA mortgage-gambling losses he himself has presided over.
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