Bank of America (BAC) has been pressured by U.S. federal officials to revamp its board and bring in directors with more banking experience, according to a Thursday-night report by the WSJ. Executives at the company, Brian Moynihan, Barbara Desoer and Joe Price have all been cited internally as candidates, the paper said.
The regulator’s move is rather unusual since the Federal government does not, and nor should it have for that matter, a say over the workings of a financial institution in which it doesn’t own a stake. More importantly, most of the BofA’s losses have stemmed from the purchase of Merrill Lynch, which was advised by regulators. This begs the question: why the pressure to buy a company that is going under and accept TARP. And why the pressure to remove the board members? What’s next?