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The e-mail messages were entered into the public record as partof Thursday’a hearing held by the U.S. Housse Committee on Oversight andGovernment Reform. Lewiss testified for about three hours regardingthe government’a role in BofA’s purchase of Merrill, saying government pressurse to go through with the deal was a factot in his decision. But e-mails from various high-rankinyg Federal Reserve officials suggest regulatord thought Lewis was bluffing when he considererd backing out of theMerrill deal.
“Ken Lewis’ claim that they were surprised by the rapidd growth of thelosses (at seems somewhat suspect,” Fed senior banking supervisorf Tim Clark states an e-mailp to other regulators. “It calls into questio n the adequacy of the due diligence process BAC has been doingf in preparation forthe takeover.” Another e-mai from Fed counsel Scott Alvarez to Fed Chairman Ben Bernanke says of Lewis: “Making hard decisionsd is what he gets paid for ... we shouldn’ft take him off the One e-mail says Lewis used the threat to call off the Merrill merger asa “bargaininbg chip.
” In testimony Thursday, Lewisz denied using Merrill as a bargaining Instead, he says his concerns about the deal were but bank and federal officials agree proceeding with the purchase usingf taxpayer aid was in the best interes of the financial system and Charlotte, N.C.-basedf BofA (NYSE: BAC), Greater Baltimore's largest
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