A Merger of Corruption

This is a story about greed and corruption, about blind ambition and selfishness.  The merger between Bank of America and Merrill Lynch during the financial crisis is historically significant, and represents the unethical behavior of many executives on Wall Street.  John Thain, former CEO of Merrill Lynch, and Ken Lewis, former CEO of Bank of America, were so focused on their own pursuit of greater compensation and power that they ignored the warning signs and understated the severity of the financial situation.

Crash of the Titans

I will be writing my paper 2 on the acquisition of Merrill Lynch and Bank of America during the financial crisis, analyzing the ethics behind the negotiation between Ken Lewis (CEO of Bank of America) and John Thain (CEO of Merrill Lynch).  This topic was particularly interesting to me because I worked at Merrill Lynch (and, by association, Bank of America) two years ago and had been exposed to the aftermath of the deal.

Moral Hazard

I think that the concept of “too big to fail” still exists today, as the financial services industry is still an oligopoly with few banks controlling the fate of the economy.  If, for example, a company like Citigroup, J.P. Morgan, or Bank of America were to go under at some point, the economy would fall apart.  Though it has tried to address the concern that banks could dismantle the financial system by regulating proprietary trading, capital requirements and others, the government has not addressed the problem of “moral hazard,” where investment banks take bigger risks because they are dealing with other people’s money and not their own.  The way to reform the banking system is to shift the risk to those that make the decisions to take the risk in the first place. 

Room Full of Trillions

The scene that intrigued me the most, was when Henry Paulsen invited all the CEO’s of the big banks to come together and meet at a round table to try and save Lehman Brothers. That room was full of people who together controlled a ridiculous sum of money. Yet, all I kept thinking about was how they are just human beings weighing their options and trying to make decisions that are either best for their companies, themselves or both. The CEO’s in the room included: John Mack (Morgan Stanley), John Thain (Merrill Lynch), Jamie Dimon (JP Morgan), Lloyd Blankfein (Goldman Sachs), and Vikram Pandit (Citigroup).

I will now try to write a dialogue as if I was at this round table discussion, and had the undivided attention of these CEO’s.

Get Educated on The Origins of the Great Recession (TBTF Film, Blog 5)

The last BC, (Chelsea L, Kamal, Jordi, and Frank) invite you to Blgo prompt 5.

Watch “Too Big To Fail” and answer one of the following.

A) Choose a scene that resonates with you most and create a dialogue in which you have the opportunity to speak with that/those characters. What would you say to them?   Write this as dialogue would appear.  Be creative.

B)  If you or someone you know were personally affected by the failures of the companies featured in the film explain the impact these events had and still have on you today.

C) Do you think this notion of “too big to fail” still exists today based on the findings of the film?

Blogs due Friday at midnight, comments by Sunday.

Related articles

• Banks are too big to fail AND too big to manage, says Stockman (marketsanity.com)
• Too Big To Fail Is Now Bigger Than Ever Before (consciouslifenews.com)
• Celente: Fascism has come to America (marketsanity.com)
• Too Big To Fail Is Now Bigger Than Ever Before (infiniteunknown.net)
• AIG CEO Robert Benmosche: ‘Too Big To Fail Has Been Solved’ (huffingtonpost.com)