Certainly the Fed may feel entitled to such a position after injecting TARP funds into BofA in 2008 – but I disagree with their move. Despite all the rhetoric, the Federal Reserve forced BofA, like many institutions, to take TARP dollars as they desperately tried to stem the tide of bank and financial institution failures. However, BofA has long since returned its allocation of TARP funds and should be allowed to conduct its business as a business.
Instead Federal regulators are now dictating policy to managers and owners of BofA. It is concerning to me that, although the shareholders (only 0.5% of whom are insiders) of BofA maintain the financial risk of ownership, the Fed that controls the management of the firm.
I, for one, am not particularly impressed with our government’s management track record, so I would be strongly in favor of that function being returned to the corporate managers and shareholders of BofA. Wouldn’t you?