Ken Lewis, Bank of America and Merrill Lynch | Business

As Hugh McColl built North Carolina National Bank into NCNB into Nationsbank into Bank of America, Ken Lewis was the guy who made all those mergers work. McColl was the swashbuckler, Lewis the beancounter. From a 2005 profile in by Fortune by Shawn Tully:

Lewis’s cool restraint impressed McColl. “He always had good credit judgment,” says McColl. “He never fell in love with a company.” But Lewis always liked the consumer business far better than corporate lending–and still does—-for a simple reason: The loan losses in retail tend to be small and predictable, while one big, failed business can blot a balance sheet for years. Lewis’s conservatism about credit is a major reason that, until recently, BofA has focused its expansion on consumer banking. It ain’t sexy, but it pays.

McColl and Lewis could hardly be more different. McColl made deals; Lewis watched the overheads and boosted the sales-per-manager ratio.

That was what seemed so strange about Lewis’s swashbuckling deal to buy Merrill Lynch just over a year ago. It was agreed upon quickly, without enough time for Lewis-style due diligence. And—not all that long after Lewis had declared that “I’ve had about all the fun I can stand in investment banking”—it was for an … investment bank.

Merrill does have phalanxes of retail brokers (a.k.a. “wealth managers“) to go with its investment bankers, and maybe the deal will work out eventually. But Lewis won’t be around to enjoy it. After a really really bad year, he’s now on the way out. And I wonder if it’s mainly because he strayed from his beancounter roots at and fell in love.

Stocks Rally Further in Run-up to EU Summit

MOSCOW — Global stocks enjoyed one of their best days in weeks on Tuesday ahead of a summit of European leaders that’s expected to be dominated by calls to boost economic growth.

Europe remains the focus of attention across all financial markets in the run-up to the June 17 Greek election that could go a long way to determining the country’s membership of the euro as well as the future of the single currency zone.

donthelibertariandemocrat

Here’s what I would have told him:

This is the Big One. History Making Time. Frankly, we should have bought Lehman. Now, we need to buy Merrill. The Govt is backing us, and we don’t want to wait and see the fallout. We’ve brayed on and on about being The Nation’s Bank. Now we have to act like we mean it. We’re taking one for the team.

You can’t say that, however. It will be fodder for comedians. Instead, you need to say that you were calmly sitting at your desk, getting your hourly back rub, when a Sure Thing Bargain came across your desk. That will be fodder for comedians as well, but not as much as claiming that you’re a patriot or a savior.

Ken Lewis must be an awfully common name. You shouldn’t have too much trouble blending back in if the deal goes sideways.

Why do I think that this was the take? Because the exact same thing happened in Britain, and for exactly the same reasons. LLoyds’ takeover of HBOS looks like a carbon copy, if anyone knows the reference nowadays. It would be interesting to compare Lewis with Victor Blank. Lloyds’ was also trying to take over Northern Rock, just as the B of A with Lehman.

My view is that they bought the same story, and that it was heavily pushed as being done with a govt guarantee during a panic, that doesn’t extend to Lewis and Blank, of course.