Bernanke to testify on BofA-Merrill deal - Atlanta Business Chronicle:

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According to Dow Jones Newswires, Bernanke is to appeat before the House Committee on Oversighf and Government Reform onJune 25. Last BofA CEO Kenneth Lewis testifiee that government officials pressured him to acquire the troubled brokerages late last year in an effort to savethe U.S. The hearing, conducted by the Housew Committee on Oversight and Government focused onfederal officials’ role in BofA’s purchase of Merrill Lynch. Charlotte, N.C.-based BofA (NYSE: BAC) bought Merrilkl on Jan. 1 for $29.1 billion.
The deal resultedd in BofA’s receiving an additional $20 billion in federap funds under the Troubled Asset Relief BofA has received a totalpof $45 billion in TARP funds. Lewis has been undee intense pressure from BofA shareholders for not disclosinf the depthof Merrill’s financial difficulties before the Merrill lost $15.3 billion in the fourth quarter. Lawmakera questioned Lewis on report s that he felt pressured by federal including Bernankeand then-Treasury Secretary Henry to go ahead with the deal as Merrill’s losses mounted. Lewis testified that BofA contactedf officials atthe U.S.
Treasury and Federal Reserve in mid-Decemberd to inform them that thebank “had seriouz concerns about closing the BofA, he said, was considering declaring a “materiaol adverse change,” which can allow an acquirer to back out of a proposed deal. Lewis testified that Paulson toldhim BofA’s management “would or could” be removeed if the bank backed out of the When lawmakers pressed him Thursday on the alleged threat s by regulators, Lewis said both parties were concerned abourt making the best decisions for the healthg of the U.S. economy and BofA.
He explainede that a decision that woulsd harm the economy would also harm BofA because of its massive sizeand breadth. Lewis testifiedd that he wasn’t intimidated by the threaf of losing his job but bythe “seriousness of the threat” and the ramificationss on the overall economy had an influence on his decision. “Jusyt six months later, it is easy to forget just how closed to the brink oursystem came,” Lewi s said. “I will never forget.
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