Ken Lewis Steps Down

In what is being billed as a "completely surprising" move, Ken Lewis is stepping down as the CEO of Bank of America. What is most surprising is that he had the chance to voluntarily depart. While credited with building the behemoth into a large money-center bank, Mr. Lewis also nearly destroyed it by continuing his acquisition spree during the credit crisis. Purchasing Countrywide and Merrill Lynch may have been good "strategic" moves, but they would've been much better has he paid less for them. It is still hard for me to believe that anyone in their right mind would've offered to pay so much for Merrill Lynch when the investment bank wouldn't have lasted another week without some sort of financial intervention. Maybe he missed out on taking that negotiations class in business school?

It's unclear whether it was the investigation by the SEC, the House Committee on Oversight and Government Reform or the New York attorney-general finally got to Mr. Lewis. All we know from press accounts is that Mr. Lewis came back from an Aspen vacation with a beard and resigned to a very shocked board, who'd been sitting around doing lord knows what for the past several years. The board certainly didn't do anything to stop the ruinous acquisitions, or keep Bank of America from paying out huge bonuses to Merrill for pissing away $15 billion. Why would it have occurred to them that they might need to actually do some work, like find a new CEO? The FT speculated about a few likely successors, the most interesting of which was Bob Steele. Mr. Steele was the former Goldman Sachs executive who was recruited to save Wachovia when it was falling apart last year. He did a bang-up job of turning the firm around as it was eventually seized by the FDIC and auctioned off to Wells Fargo. But he did work at Goldman once, so he's obviously a genius and will probably get the job.