Somehow we get the impression that newly elected Bank of America (BAC) chairman Walter Massey shouldn’t get too comfortable.
WSJ reports that government officials have told the bank to clean house and replace the board with a group of folks that know a little bit more about how banking works. Massey himself is the former President of Morehouse college and a physician — not a banker.
Recall that when the stress test was unveiled, one of the conditions was that in addition to coming up with a fundraising plan, the banks also had 30 days to reorganize their boards, and possibly their top officers in a manner pleasing to regulators. At the time, we assumed this meant clean-house time at Citi and BofA.
For its part, Citi has already named four new financial experts to its board.
And though we’re not sure exactly how directors were selected before, we’re guessing that prior to this crisis, a spot on the board of Citi or Bank of America probably felt more like a spot on some big society charity group. The organisations probably seemed to stable and huge that being on the board was more of like an honour for the elite than a responsibility to oversee a volatile operation.