May 16, 2009

The nation's leading banks may have been deemed solvent, but it remains to be seen whether top management at those firms will soon go bust.Among the findings in its two-month long "stress test" program announced May 7, the government not only told 10 institutions to raise a total of $75 billion in additional capital, but also pushed banks to take a hard look at their leadership.Industry regulators specifically asked banks to review both top executives and board members over the next month "to assure that the leadership of the firm has sufficient expertise and ability to manage the risks presented by the current economic environment."

Some experts suggest those remarks could foreshadow a wave of management changes."There is some vulnerability there," said Gary Townsend, former bank analyst and current president of the Chevy Chase, Md.-based investment adviser Hill-Townsend Capital.Of course, when talk of management surfaces within the financial services industry, it often centers around two of its most troubled firms: Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500).