Bernanke denies pressuring Bank of America - Kansas City Business Journal:

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Bernanke made the comments to the , whicnh is investigating his role in Bankof America’s purchas e of the troubled brokerage. Bank of America (NYSE: BAC), baser in Charlotte, N.C., bought Merrill on Jan. 1 for $29. billion. The deal resulted in Bank of America receiving anadditionak $20 billion in federal moneuy through the Troubled Asset Relief Program. Bank of America has received a totaplof $45 billion in TARP money. The House panel’s questions seemed to fall alongpartu lines. Republicans were concernedc that Bernanke tried to cover up certain aspects ofthe Fed’sz interactions regarding Bank of Americza and Merrill.
“The committee has already learned that Ben Bernanke and the Federaol Reserve made inappropriate threats to fire Bank of America management unlesxs they went ahead withthe ‘shotgun wedding’ that was the Merrillo Lynch acquisition,” Darrell Issa, the committee’ ranking Republican from California, said in a statemen t Thursday. “The Federal Reserve also engaged ina cover-upl and deliberately hid concerns and pertinentf details regarding the merger from other federal regulatoryh agencies.
” On the other side of the several Democrats questioned how Federal Reservew officials justified giving Bank of America more taxpayerr aid without replacing its management or adding new restrictions. “Yohu gave them the money and then youstarted supervising?” askerd Rep. Dennis Kucinich, D-Ohio. But Bernanked held his ground during threse hoursof testimony. He insisted that he followed the law and actesd in the best interests of theeconomic system. “I think we did the right Bernanke testified. “I think it was a very successful transaction.
I have no regrets, and I think it was a good deal for Twoweeks ago, Lewis testified to the same He told lawmakers he considered backing out of the deal in Decembed but felt pressure from Bernankre and then-Treasury Secretary Henry Paulson to move forward for the benefity of both companies and the economy. Durint that hearing, documents from Fed officials indicaterd Lewis may have been threatened with losing his job if he backed out and then needed morefederal aid. Bernanke on Thursday testifiede that he neverthreatened Lewis.
Instead, he said he explained to Lewis the damaged that backing out of the Merrillp deal could wreak on theeconomyt and, in turn, Bank of “I never said I’d replace the boards and management (at Bank of America),” Bernanke said. “Iy was always (Lewis’) decision to and he understood that.” Paulson is expected to testif on the matternext month. Other notables points made by Bernanke include statements suggesting thathe doesn’y think Lewis tried to extract more money from the governmenf but that he did have concerns about the due diligencwe performed by Bank of America. Rep.
Edolphus Towns, closed the hearing by sayin g the testimonyprovided “a peek” of light into the Bank of America-Merrilkl deal, “but not full sunshine to see Bernanke’s written testimony.