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Ken Lewis, CEO of Bank of America, will step down in December, leaving the country’s biggest lender without a successor for now. Mr. Lewis’ surprise departure, announced late Wednesday night, ends a turbulent 8 year run at B of A and comes days after Morgan Stanley, JP Morgan Chase and Wells Fargo swept their executive suites. The move comes as Wall Street has rebounded from the crisis that followed the collapse of Lehman Brothers last year and led the US government to inject US$45B of taxpayer’s money into B of A. Mr. Lewis and B of A have been at the center of investigations by the US SEC, the House Committee on Oversight and Government Reform and the New York AG’s office over the bank’s acquisition of Merrill Lynch. Read more

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US bank Wells Fargo & Company forecast a record profit last week, South Korea steered clear of recession, and Chinese export data beat expectations, all offering hope that the worst of the financial crisis had passed. Encouraging data on US trade and jobless claims helped Wall Street stocks end up for a fifth week on Thursday, while White House economic adviser Lawrence Summers predicted the economy would emerge from a sense of “freefall” in months as stimulus and rescue efforts took effect.

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Investors cannot shake the fear that the US government will seize control of a Big Bank, but experts do not believe that will happen.

The word “Nationalization” puts fear in the hearts of bankers and their equity and debt holders like no other word.

The fear of such an event over the past few weeks has caused a lot of speculation that the US government may have to seize control and management of one or more of the country’s largest financial institutions.

This is the worry that has sent bank stocks into a death spiral, as shares of some of the biggest banks, including Citigroup (C), Bank of America (BAC), and Wells Fargo have been hammered in a big way.
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