FDIC’s Bair says some big-bank CEOs will be replaced

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The federal government is preparing to wield the axe on big-bank chief executives who aren’t doing what regulators consider to be a ‘good job,’ Federal Deposit Insurance Corp. Chairman Sheila Bair said today.

So, after the ‘stress tests’ on 19 major banks, and the government’s demand that 10 of them boost capital levels, ‘Management needs to be evaluated,’ Bair said on Bloomberg TV’s ‘Political Capital with Al Hunt,’ to be broadcast this weekend.

‘Have they been doing a good job? Are there people who can do a better job?’ she said.

‘I think there will be an evaluation process,’ Bair said. ‘We’re requesting it as part of the capital plan. And yes,’ she said, responding to a question from Hunt about some CEOs getting shown the door.

More Bair: ‘There’s large banks, there’s some that have been managed quite well and are dealing with this crisis quite well. Others have had greater needs for government help. So I think they do need to be closely evaluated. And, you know, I think -- I don’t like to get in the position of telling people to make appointments, but I think in terms of the criteria, qualifications, I think those types of standards, we have an obligation to articulate.’

Naturally, she didn’t name names. But Bank of America Corp.’s Ken Lewis remains high on the list of CEOs whose jobs are believed to be at risk.

BofA shares are leading big-bank stocks lower today, down 54 cents, or 5%, to $10.77 at about 10:10 a.m. PDT. The stock is off 24% for the week.

The Wall Street Journal reported today that the government has been pressuring BofA to ‘revamp its board by bringing in directors with more banking experience.’

-- Tom Petruno