• Posted on Thursday, May 15, 2008

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B of A chief predicts more financial services consolidation

By Rick Rothacker | Charlotte Observer

Troubles in the financial services industry will lead to more bank mergers and acquisitions, Bank of America Corp. chief executive Ken Lewis said today.

"I believe this downturn will accelerate consolidation in the banking industry across geographies and in the financial services industry across product and market segments," Lewis said in prepared remarks for the commencement ceremony at New York University's Stern School of Business. In particular, he said "monoline" companies that specialize in just one product are likely to be buyout candidates because they don't have diverse revenue streams to buoy them.

In his speech, Lewis also questioned whether investment banks should be bailed out by the government. "Providing a public backstop to an inherently risky business that is not required to backstop itself is a tough sell for taxpayers, and carries no small amount of moral hazard," he said.

Read the full story at Charlotte.com.

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