You are hereHome >
Today's Wall Street Journal offers the story "Bank of America Ponders Retreat." It discusses a BofA emergency plan for retrenchment that would include further branch shrinkage than currently-expected reductions.
From the WSJ: " The company already has signaled that it plans to get rid of 750 of its 5,700 branches in the next few years. About $60 billion of the bank's roughly $1 trillion in deposits are scattered across 310 geographic areas with a population of less than 500,000 each, according to research firm FIG Partners. "These small, seemingly irrelevant cities could be quite meaningful for another small bank," the firm said in a recent report.
Of course, the bank's problems are much bigger than its sprawling branch network. It paid top-dollar for bottom feeder mortgage firm Countrywide (still a mess) and then-failing Merrill Lynch (now apparently a bright spot). CEO Brian Moynihan inherited these and myriad other problems created by the relentless growth goals of predecessors Hugh McColl and Ken Lewis. The WSJ aptly refers to their efforts as based on some sort of "manifest destiny" world-view. I agree with that analysis, but would add that manifest destiny turned out to be McColl and Lewis's hubris.
Meanwhile, over at his New York Times blog, economist Simon Johnson notes that the "left" and the "right" could get together by supporting structural reforms to bank size-- including the "hard cap" on bank deposit size proposed in the 2010 Safe Banking Act and floor amendment from Senators Sherrod Brown (D-OH) and Ted Kaufman (DE). Simon Johnson says we need structural reforms because conduct remedies to bank practices haven't worked and won't work:
"The way to cut our Gordian financial knot is simple — force the big banks to become smaller. Small banks and other financial institutions can be allowed to fail, unencumbered by any kind of government bailout. MF Global failed recently with about $40 billion in total assets; the shock waves did not bring on global panic."
The overuse of antibiotics on factory farms is threatening the effectiveness of lifesaving antibiotics. Call on the Obama administration to put an end to the worst practices.
Your donation supports U.S. PIRG’s work to stand up for consumers on the issues that matter, especially when powerful interests are blocking progress.
Join our network and stay up to date on our campaigns, get important consumer updates and take action on critical issues.