Banks Have Gotten a Bum Rap: BofA Chief Ken Lewis

The steps already taken are working, so let the market sort it out
By Clay Dillow,  Newser Staff
Posted Mar 9, 2009 8:57 AM CDT
"We agree with Federal Reserve Chairman Ben Bernanke's statement that nationalization of banks is not necessary to stabilize the banking system," Bank of America's CEO Kenneth Lewis writes.   (AP Photo)
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(Newser) – Banks have been unfairly tarred by misconceptions about the current financial crisis, Bank of America CEO Kenneth Lewis argues in the Wall Street Journal. It's not true that banks aren't lending, he writes. They are just doing so more responsibly, as they should. And it's not true that bad banks are being protected: "The companies that did the most to cause this mess are gone." Lewis argues that most banks are solvent; "we've seen fewer than 50 bank failures," and most of the rest will survive.

It's not true that taxpayers are giving banks charity, Lewis says—TARP funds are loans, and " taxpayers are getting a strong return on their investment." But the premise that nationalization is the only way to fix US banks is the worst misconception, Lewis writes. “Nationalization would undermine confidence in the financial system and send shudders through the investment community.”