Three years ago, as we were wondering whether we were witnessing the complete meltdown of the financial services industry, Bank of America bought Merrill Lynch and Barclays took over the bankrupt Lehman Brothers.  Steven Davidoff--professor at the Michael E. Moritz College of Law at The Ohio State University--looks back at those deals, and he argues Barclays won, and Bank of America did not.  And the primary reason, Davidoff writes at the New York Times DealBook blog, is because Barclays was more patient:

Things would have been different had Bank of America waited. It would at a minimum have paid a bargain basement price for Merrill, one that was tens of billions lower at least.

There is still some talk of spinning off Merrill Lynch. The operations of Merrill have already been combined with Bank of America, so a real separation would be complicated. And the recent reorganization of the bank’s management — which puts Merrill Lynch’s wealth management business under David Darnell, the co-chief operating officer, but Bank of America-Merrill Lynch under the other chief operating officer, Tom Montag — also makes a split more difficult.

Ultimately, Barclays made a better deal by doing what should be done in an acquisition, carefully assessing the future liabilities and limiting them as much as possible. But let’s be clear. Barclays did this only because it was forced to by the regulator.

The first lesson of Bank of America and Merrill Lynch is that impatience and a chief executive’s hubris can lead to some very bad decisions. And regulators can sometimes stop these heady moves.

Read The Merrill Lynch and Lehman Deals, 3 Years Later here.