So now that Ben Bernanke, Tim Geithner, and Sheila Bair have put banks on notice that anyone who failed the stress test and needs to raise new capital (or recycle government capital) will need to review their existing management and board of directors, people are asking what this means.
“I suspect that this requirement is basically a way to allow Treasury to make any changes it wants at the top of the banks’ org charts,” Felix Salmon writes.
Is this a good idea? We’re sceptical the government has the competence to review the competence of a failing banks’ board or management. But it looks like this horse is already out of the barn.
So let’s give Ben, Tim and Sheila a hand. Which bank’s management would you remove?