Failing upwards at BofA
Even though Brinkley was one of the few top female executives working on Wall Street, her departure is well deserved and has nothing to with gender inequality in the world of finance as some might suggest.
It’s all about failure, and there’s been plenty of that at BofA, in light of the more than $150 billion in bailout money and loan guarantees U.S. taxpayers have had to float the nation’s largest bank by assets.
Presumably, Brinkley signed off on BofA’s disastrous move into collateralized debt obligation underwriting on the eve of the mortgage meltdown.
A case in point is the ill-fated $4 billion CDO that the bank packaged and sold for two Bear Stearns hedge funds a month before the funds’ collapse in June 2007.
BofA lost at least $2 billion and possibly more in that transaction. Brinkley will not be missed.
But replacing Brinkley with Gregory Curl, the architect of the Merrill Lynch acquisition and a crony of CEO Kenneth Lewis, is inexplicable and gives more ammunition to bank shareholders who are agitating for the ouster of Lewis.
Robert Stickler, a bank spokesman, says people are more than free to question the promotion of Curl but to refer to him as a crony or confidant of Lewis is silly.
“This just shows how much you don’t know. Greg has been Mr. Outsider at the bank for years,” he said.
Curl’s bona fides, if that’s what you want to call them, are in deal making and commercial lending. There’s not a lot of experience in risk management on his resume, even though Lewis says his man is more than up to the job because of his “natural ability to look at things, see both the upside and the potential pitfalls.”
It’d be nice if Lewis told us what pitfalls Curl saw in the Merrill deal.
What BofA needs now is a seasoned, objective risk management professional. Shareholders would have been better served if Lewis went outside his banking colossus to find someone who would bring a fresh perspective on risk management to BofA.
The Wall Street Journal is reporting that the Federal Deposit Insurance Corp. is pushing for a major management, a move that could put CEO Vikram Pandit’s job in jeopardy. You can’t quarrel with that.
But it’s move like the elevation of Curl that should prompt the FDIC to do the same at BofA.