The announcement that Ken Lewis, 62, will step down as CEO of Bank of America is more evidence that the banking system really is on the path to recovery.

When an industry implodes, the leaders of its major institutions are usually kept in place during the height of the crisis, just as they often were during the telecom meltdown of the late '90s. It is the duty of the captains of the unfortunate fleet to guide their battered vessels safely into harbor. Once the ships of the line have returned to port, the courts-martial may begin.

For Captain Lewis, the court-martial begins now.

Bank of America faces accusations that it failed to reveal the full extent of the financial problems at Merrill Lynch while it was seeking government help to fund the $50 billion deal, which closed January 1. Congress has demanded that the bank forgo its right to privacy regarding certain relevant documents. And there is public outrage over fact that Merrill paid millions in bonuses to its executives, with the knowledge of Bank of America, despite the fact that both institutions received federal bailouts.

New York Attorney General Andrew Cuomo has issued subpoenas to former bank directors over the issue, and he dragged Lewis into court to testify about what sort of pressure Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Hank Paulson may have applied to BofA to get the Merrill deal done. If that wasn't enough, Federal District Judge Jed Rakoff refused to approve the bank's $33 million settlement with the Securities and Exchange Commission, which would have resolved regulatory inquiries into the Merrill deal.

It's an inglorious end for Lewis, 62, who was stripped of his title as chairman in April. A onetime credit analyst who joined predecessor institutions in 1969, Lewis turned BofA into the nation's largest bank, one that matched his massive ambition. While rival Jamie Dimon of JPMorgan Chase played it relatively safe, Lewis spent freely to amass leading positions in one market after another. While Dimon bought Bear Stearns for a song in a government-backed deal, Lewis landed Merrill Lynch. He also paid $4.1 billion in 2008 to buy Countywide Financial, which was deeply involved in the subprime mortgage business. In 2005, Lewis led the $35 billion acquisition of credit-card giant MBNA.

In better times, the high-stakes strategy might have paid off. With leading positions in so many markets, the bank would have been a cash-generating machine. During the early months of the financial crisis, Bank of America actually looked pretty smart. As times got worse, its scale worked against it. Tragically, as the economy really tanked, Lewis simply could not resist the urge to round out his portfolio with Merrill, which allowed BofA to take a much more commanding position in investment banking.

As it turns out, there was a good bit of the pirate in Captain Lewis.