Release The Hounds

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Heads will roll.

Federal Deposit Insurance Corp. Chairman Sheila Bair said some bank chief executives will be replaced in the next couple of months as the U.S. scrutinizes lenders subjected to tests to evaluate their financial strength.
"Management needs to be evaluated," Bair said today on Bloomberg Television's "Political Capital with Al Hunt," to be broadcast this weekend. "Have they been doing a good job? Are there people who can do a better job?"

So let us ask what may or may not be an obvious question: Why exactly do we need the government to make management changes at the top that they could not force without controlling a majority of common if not for the particular accident that they happen to have a great deal of political power at the moment?
We suspect two potential answers:
1. Shareholders just don't care that much to change management and the government is overreaching "because we can."
2. It's basically impossible to unseat entrenched management in a public company and government is performing a useful service by cracking the regulatory whip?
Discuss.
Bair Says Some Bank Chiefs Will Be Replaced in Next Few Months [Bloomberg]

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