Not too long ago, as Glass Steagall crumbled, investment banks feared that commercial banks would leverage their lending relationships into investment banking relationships. The advantage seemed huge. At Bank of America, the issue cropped up again with a huge twist. According to the Financial Times, Merrill Lynch investment banks have had some deal ideas nixed by Charlotte executives because the bank has a lending relationship with some of the involved companies; it wants to avoid conflicts.

The idea of leveraging lending relationships only works if the banks allow it. The FT puts it starkly: "The Merrill investment bankers will not be allowed to infect B of A's global-relationship banking client list with their racy ways." Whew! We knew CEO Ken Lewis had issues with investment banking. This speaks to some huge cultural problems. 

For more:
- here's the FT article

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