JPMorgan Chase & Co. (JPM), Wells Fargo & Co (WFC): Winners & Losers of the Financial Crisis

Meanwhile, Bank of America Corp (NYSE:BAC) and Citigroup Inc. (NYSE:C) have been forced to retrench in the face of tens of billions of dollars’ worth of losses. Both banks plunged headlong into the subprime mortgage market, and neither emerged unscathed. Bank of America alone has paid out upwards of $50 billion dollars to atone for the previous misdeeds of Countrywide Financial.

The lessons from these divergent experiences remain as apt today as they were five years ago. In the first case, it is a banker’s job to manage risk. Every couple of decades, most economies experience some type of financial downturn. Banks led by bankers who don’t account for this in the construction of their portfolios will suffer, if not outright fail.

And in the second case, it’s always prudent to be wary of a growth-by-acquisition business model. This goes for all companies, but particularly so for banks given that they stand the risk, as Bank of America Corp (NYSE:BAC) can attest, of unwittingly acquiring a ticking time bomb.

The article 5 Years Later: Winners & Losers of the Financial Crisis originally appeared on Fool.com.

John Maxfield owns shares of Bank of America. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. 

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.