er 60% of its share value in the last year, chose to go with a risk manager with government/regulatory expertise as its top executive rather than a commercial/retail banker. While Wachovia is a large retail bank the decision makes a lot sense on a variety of different levels. Steel has been a close confidant of the current Secretary of the Treasury, Hank Paulson who had previously been the former Chairman of Goldman Sachs. Steel is also a former key player with Goldman. He left the firm as Vice Chairman in 2004 after Lloyd Blankfein solidified his position at the top of the firm. Steel worked for Goldman starting in 1976 and moved rapidly up the ranks. According to a story by David Mildenberg and Ari Levy of Bloomberg in his position at Treasury,
Steel helped hammer out the agreement that culminated in JPMorgan's purchase of Bear Stearns Cos.Analysis of Steel's selection has been all over the map and will continue to do so for the next number of months. Many specialists have expressed their concern over his lack of retail and commercial banking expertise while others find his regulatory expertise/Washington connections extremely important. What was even more fascinating, however, have been the many comments offered by people that have worked with him or known him concerning his special talent to work with others and his unique abilities to multitask while handling extremely difficult challenges all at once. Steel is the Chairman of the Board of Trustees of Duke University his alma mater. According to a story by Rick Rothhacker for The Charlotte Observer,
Steel joined Duke's board of trustees in 1996 and was chairman of the committee that selected Richard Brodhead as president in 2003.In that role, Steel stood out for his ability to quickly assess the university's needs and get people working toward a common goal, said Sara Sun Beale, a Duke University law professor who worked with him on the search committee."He has a great ability to work with a wide range of people and move a group forward," Beale said.At the same time, she said, it is clear he would work on several projects at the same time."You will be working on an assignment, and he is working just as hard as you are on the same assignment, and then you realize he is also working on four other things," Beale said. "Then you find out he is equally effective in those areas, too. It's pretty amazing."
At first glance, Steel's appointment seems to confirm statements from Chairman Lanty that Wachovia intends to remain independent. Lanty made this statement as speculation continued to grow that the fourth largest bank in the United States was looking to be acquired. But speculation on Wachovia's status as an independent company will surely continue. Steel is a former Goldman Sachs executive. Goldman of late has been intimately involved in many of the problems facing the bank and is even considered one company that may acquire the firm. Goldman has been hired to examine the bank's loan portfolio and has been instrumental in helping the firm raise money this year. According to the Biz Journal,
The choice of Steel strikes some analysts as interesting given that Wachovia has hired Goldman to analyze its loan portfolio and to "evaluate various alternatives."Goldman helped the company raise $8 billion earlier this year through the sale of common and preferred stock.
Speculation also continues that JP Morgan might push to acquire Wachovia. Steel has a great deal to learn in a very short time frame. Considering the problems Wachovia faces in this extremely difficult marketplace, I am impressed with his selection. Hopefully, he has sufficient time to help the company without being forced to make hasty decisions that could backfire. Stay tuned.
For more:
Forbes (AP)
No comments:
Post a Comment