Did Big Government Force Out Bank of America (BAC) CFO?

Bank of America (NYSE: BAC) investors were left scratching their heads Thursday after the company announced sweeping management changes Wednesday evening, including the departure of CFO Bruce Thompson. One analyst thinks big government could be behind the move.

Rafferty Capital analyst Richard Bove highlights that Bank of America has a long history of management instability below the CEO level although the last CEO was forced out of his position also. He said one reason for this has been the poor performance of the company. Another has been its unusually incapable Board of Directors. A third may be its inability to meet the demands of the U.S. government.

Bove reiterates his long-standing belief that the U.S banking system is 'de facto nationalized' by the U.S. government. "If that is true then it is critical that any bank does what the government wants in the fashion that the government wants or there will be penalties," he comments. "In Bank of America’s case, the company has constantly failed to score 100% on its stress tests."

The analyst notes that the responsibility of getting the stress test and other government reporting functions right is that of the CEO and the CFO. In this case the CFO has been picked to go he said. The CEO may have been spared as he has had some successes in turning around the institution.

Bove also said the creation of a new position entitled chief administrative officer is also significant as is the selection of the head of Human Resources to run it. "This is because the government is looking at more than financials when it demands reports from banks," he comments.

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