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Bank of America Corp.’s board expressed support for Chairman and Chief Executive Kenneth Lewis following its meeting Wednesday. “The board today during the regular meeting expressed support for Ken Lewis and the management team, noting their expertise in managing through challenging environments and in assimilating mergers,” lead director Temple Sloan Jr. said in a statement issued through a bank spokesman.

BY DAN FITZPATRICK and JOANN S. LUBLIN Bank of America Corp.'s handling of its acquisition of troubled Merrill Lynch & Co. has put Chairman and Chief Executive Kenneth Lewis on the hot seat with irate shareholders. Among those disappointed in the steep decline in the bank's stock are two veterans who helped Mr. Lewis rise to the top. Hugh McColl Jr., Bank of America's buccaneering former chairman and chief executive, who picked Mr. Lewis as his successor, and James Hance, the bank's former chief financial officer, privately have expressed disappointment in the types of risks taken by Bank of America...

Iceland's Minister of Commerce Bjorgvin Sigurdsson has resigned, two days after the prime minister announced his own departure due to pressures from the island nation's economic collapse. Mr Sigurdsson, a member of Iceland's junior Social Democrat coalition party, made the announcment at a news conference this morning. 'I have decided to do this to take responsibility,' he Prime Minister Geir Haarde shocked the country on Friday when he said he would not seek re-election and called for a general election on May 9. The government of Iceland became the first in the world to be effectively brought down by the...

BY JAMES R. HAGERTY The Federal Home Loan Banks, which have thrived on obscurity for more than seven decades, are moving uncomfortably into the spotlight as souring mortgage investments threaten to leave some of them below their capital requirements. The 12 regional home-loan banks are a major source of funding for thousands of commercial banks, thrifts and credit unions across the country. As other sources of credit dried up, they increased their lending to financial institutions to about $1 trillion as of Sept. 30 from $641 billion at the end of 2006. In recent weeks, however, several of the home-loan...

BY DAN FITZPATRICK Bank of America Corp. Chief Executive Kenneth Lewis on Friday rejected the suggestion that he and his team did not conduct enough due diligence before agreeing to buy securities firm Merrill Lynch & Co., saying forecasts did not suggest Merrill's assets would drop so suddenly in value. "We did not expect the significant deterioration in mid to late December that we saw," he said on a conference call with analysts. The fourth-quarter decline at Merrill led to an agreement announced Friday giving Bank of America $20 billion in additional U.S. aid and a government guarantee to backstop...

BY ERIC DASH, LOUISE STORY, AND ANDREW ROSS SORKIN Kenneth Lewis gambled on bold acquisitions to build Bank of America into the nation's largest bank. But the need for fresh government support to grapple with the newly revealed losses at Merrill Lynch, the brokerage firm he snapped up in a rapid-fire arrangement at the height of the financial crisis in September, raises questions about whether the bank has gone a deal too far. Two weeks after closing its purchase of Merrill Lynch at the urging of U.S. regulators, the government cemented a deal at midnight Thursday to supply Bank of...

More than 1 million sought protection last year and filings are expected to rise in 2009. U.S. consumer bankruptcy filings jumped nearly 33% in 2008 amid a recession that's expected to keep filings rising into the new year. Overall consumer filings reached 1.06 million last year, up from 801,840 in 2007, according to data collected by the National Bankruptcy Research Center and published by the American Bankruptcy Institute, a research group based here. The recession that began in December 2007 has stretched many consumers who are turning to bankruptcy protection amid job losses, mortgage foreclosures and heavy personal debt. "Consumers...

An Arizona State University economics professor says our current economic nightmare is ‘hopefully' a once in a lifetime event. Anthony Sanders with the WP Carey School of Business says the United States is happy to put the year 2008 in the rear view mirror because the past few months have seen the worst economic times since the Great Depression. He says the repeated bailouts of everybody from banks to car makers to insurance companies went massively awry. "We have - the retail industry wants a bailout, everybody wants a bailout - in other words, I would call this in terms...

WASHINGTON – Thanks to the government, PlainsCapital is getting bigger. The Dallas-based bank received $87.6 million last month from the U.S. Treasury Department's $700 billion rescue program, known as TARP. The bank says it intends to put the money to good use – increasing loans for businesses, students and even jumbo mortgages. But it doesn't rule out using funds for acquisitions. "As we see this economy shake out, there are going to be some that make it and some that don't make it," said Alan B. White, PlainsCapital's chairman and chief executive. "And there are going to be good opportunities...

he story of the two-bedroom, one-bath shack on West Hopi Street, is the story of this year's financial panic, told in 576 square feet. It helps explain how a series of bad decisions can add up to the worst financial crisis since the Great Depression. Less than two years ago, Integrity Funding LLC, a local lender, gave a $103,000 mortgage to the owner, Marvene Halterman, an unemployed woman with a long list of creditors and, by her own account, a long history of drug and alcohol abuse. For a $350 fee, an appraiser hired by Integrity, Michael T. Asher, valued...

WASHINGTON (AP) - The Treasury Department opened the door Friday to using a Citigroup-style rescue package to help other troubled financial institutions. The financial lifeline thrown to Citigroup Inc. (C) in late November involved backing billions in risky assets and providing the banking giant with a fresh capital infusion. Treasury said participation by other companies in such a program would be weighed on a case-by-case basis. Treasury said it would consider, among other things, whether the "destabilization" of a financial institution could threaten the viability of creditors and others. It also would weigh the extent to which the institution faced...

As he madly dashes further into socialism, Comrade George W. Bush seems determined to lavish billions of taxpayer dollars on Detroit’s automakers — conservatism, Congress, and the Constitution be damned.

Love him or hate him, this time Jim Cramer makes a good point. While some in the media have expressed fury over allegations that Bernard Madoff ran a Ponzi scheme that may have cost investors up to $50 billion, CNBC’s “Mad Money” host Jim Cramer made another point. “To everybody in the press, who’s calling Bernie Madoff’s alleged $50 billion scam the ‘largest Ponzi scheme ever,’ I say give me a break,” Cramer said on his Dec. 17 show. According to Cramer, the largest Ponzi scheme in history is run by the federal government – Social Security. “We know the...

Bankers who've been seeking Congress’ help to suspend "mark to market" accounting rules lost a battle today: The staff of the Securities and Exchange Commission recommended in a report that mark-to-market rules should be maintained, although "improved." The report had been ordered up by Congress in October as part of the financial-system bailout. The banking industry asserts that mark-to-market, or fair-value, accounting worsened the financial crisis. The rules require require financial institutions to value securities on their books at current market prices, even if the securities don't mature for many years.

Banks and savings institutions in the U.S. appear headed for their first overall quarterly loss since 1990, as troubled loans pile up faster than the federal government's unprecedented efforts to aid the battered industry. Since posting combined profit of $1.7 billion in the third quarter, already a 94% plunge from a year earlier, life has gotten even worse for the roughly 8,300 financial institutions with deposits backed by the Federal Deposit Insurance Corp. Rising unemployment is causing more agony from old problems such as shaky mortgages and credit cards, and losses now are spreading to commercial real-estate loans.

In the last 25 years, few prices have gone up as much as housing and college tuition. We know what happened to housing. So when will we hear the pop of the college-tuition bubble?There are many competing explanations for why tuition has more than quadrupled since 1982, but one simple economic principle underlies them all: Universities can only charge as much as students and their families will pay. Sure, the University of California may have doubled its fees a few times over, but students kept paying, right?

Credit line reductions, account repricing, and other steps that card issuers are taking to control risk could soon start causing their customers to do something many homeowners did this year: walk away from their obligations. In the past month current and former industry executives and observers have raised concerns that prevalent risk management tactics may spur such behavior — even among customers who still have the capacity to pay. For example, some observers said aggressive repricing could lead to a spike in "bust-outs" — when cardholders decide to run up as large a balance as possible before abandoning the account....

Despite just receiving $13.4 billion in government loans, General Motors (GM) hopes to make another federal cash withdrawal, probably in early 2009. GM spokesman Greg Martin noted the automaker had originally requested $18 billion in "bridge loans" and revolving credit from the government in late November to help survive the recession. Instead, talks stalled in Congress and the Bush administration acted on its own to approve $17.4 billion in loans, with $4 billion going to Chrysler.

NEW YORK (Reuters) - Wachovia Corp's shareholders approved the bank's takeover by rival Wells Fargo & Co on Tuesday, bringing one of the largest mergers stemming from the financial crisis near to completion. Separately, regional bank PNC Financial Services Group Inc said its planned takeover of National City Corp was approved by shareholders of both banks and is expected to close by December 31.

In front of a ballroom full of N.C. bankers in January 2006, Wachovia chief executive Ken Thompson warned of the dangers of “toxic” home loans. A problem with so-called option adjustable-rate mortgages, he told the group, was that homeowners can end up owing more at the end of the month than the beginning, which can be a “tough situation” for customers and lenders. “I have literally been amazed at the terms offered by some mortgage lenders, thankfully not at Wachovia and thankfully not so much in North Carolina,” he said. Four months later in May 2006, Thompson took a $24...