Well, we can say one thing for sure: The search for a new Bank of America
Potential candidates ranged from outsiders like Bank of New York Mellon's
Good, better ... but good enough?
Not surprisingly, B of A's board lauded Moynihan as "the best person for the position." Reality, though, may tell a different tale as external candidates, who were largely favored by regulators and many investors, declined the bank's invitations and left it with limited choices. So to say that Moynihan was definitely the "best person" is sort of like me saying that peanut butter and jelly was my best choice for lunch today after I realized that my leftover chili had gone moldy.
So is Moynihan really the right guy for the job? For starters, considering the position that the bank found itself in as the global financial crisis set in, it would seem that new blood and fresh ideas, rather than a tenured insider, might bring welcome change to the bank. In addition to the firms of the outside candidates mentioned above, banks like US Bancorp
Smooth operator
Additionally, it was the shenanigans accompanying the acquisition of Merrill Lynch that provided the extra push to force B of A's former CEO, Ken Lewis, out early. Picking Moynihan doesn't help much in terms of taking that ugly spotlight off the company, as he was the bank's general counsel at the time of the purchase and was closely involved with putting the deal together.
And while B of A's board highlighted the fact that hiring an insider such as Moynihan would provide a "smooth transition," it's questionable whether a smooth transition is really in the best interest of shareholders. For a bank that was in bad enough shape that it had to take an extra helping of TARP money, a CEO that would have shaken things up a bit might have been a good thing.
Bank of America: A New Hope?
But as my mom always told me, "If you don't have anything nice to say, don't say anything at all." So in Moynihan's defense: Following B of A's 2004 acquisition of FleetBoston, he took over as Bank of America's president of Global Wealth and Investment Management, a segment of the bank that held up pretty well during the financial crisis. And by the time he moved over to head up corporate and investment banking in 2007, it was likely too late to do a whole lot about the loss-inducing cancers in that segment. So kudos there, Brian.
In the end, with talk of a smooth transition, along with Moynihan telling The Wall Street Journal that "he also doesn't foresee any 'big changes' in the strategy of the nation's largest bank by assets," it seems that investors can expect Moynihan to be more of a Lewis 2.0 than a true change -- which I don't consider to be a good thing. But hopefully the bank's new chief proves me wrong and he's actually able to whip the monster bank back into shape.
