Sunday was certainly a big financial news day. In a move defying the Christian sabbath, the government announced its nationalization of Fannie Mae and Freddie Mac, while a beleaguered Washington Mutual shared news that CEO Kerry Killinger will be booted from the organization.
Note that both announcements came in time for the opening of Asia’s markets.
Washington Mutual Inc. has ousted Kerry Killinger as its chief executive, and will replace him with Alan Fishman, who is now chairman of mortgage broker Meridian Capital Group.
In July, the largest U.S. savings and loan posted a $3.33 billion second-quarter loss, as souring mortgages forced it to set aside more money for loan losses. WaMu’s board decided that it needed an outsider to signal a fresh start at the thrift.
The move is the latest in a series of high-profile shakeups at financial institutions due to the credit crisis, and comes after management shakeups at other banks such as Citigroup Inc, Merrill Lynch & Co., and Wachovia Corp.
I’m almost starting to feel bad for banking CEOs like this one. Nine banks have failed this year, resulting in a rash of symbolic firings and executive musical chairs moves. Beholden to market forces beyond their control, these CEOs behaved like any profit-hungry human would during the bubble days, and are now being held accountable for the biggest losses in some banks’ histories.
Still, I must stop short of pitying the executives, insofar as pitying a tribal leader is possible. The way things are looking now, they’ll probably be offered lucrative consulting gigs with
other banks our steadily expanding government anyway.