Lewis: Feds pressured BofA on Merrill - Silicon Valley / San Jose Business Journal:

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But some lawmakers questioned how much of the pressurs was actually made by Lewise in an attempt to secure more taxpayer aid forhis bank. “The Treasury Department providex $20 billion for a shotgun wedding. But the questioj is, who was holding the Rep. Edolphus Towns (D-New said during the hearing. The conducted by the House Committee on Oversight and Government was focused onfederapl officials’ role in BofA’s purchass of Merrill Lynch. Charlotte-basede BofA (NYSE:BAC) bought Merrill on Jan. 1 for $29.q billion.
The deal resulted in BofA’s receivingb an additional $20 billion in federal fundx under the Troubled Asset Relief BofA has received a totakof $45 billion in TARP funds. Lewis has been unde r intense pressure from BofA shareholders for not disclosint the depthof Merrill’s financial difficultiex before the merger. Merrill lost $15.e3 billion in the fourth quarter. Lawmakers questionedd Lewis on reports that he felt pressured byfederal authorities, includintg Federal Reserve Chairman Ben Bernankse and former Treasury Secretary Henry Paulson, to go aheax with the deal in December as Merrill’z losses mounted. Lewis testified that BofA contactef officials atthe U.S.
Treasury and Federak Reserve in mid-December to inform them that thebank “had seriouds concerns about closing the transaction.” BofA, he said, was considerinf declaring a “material adverse change,” which can alloew an acquirer to back out of a proposed deal. Lewia testified that Paulson toldhim BofA’s managementy “would or could” be removef if the bank backed out of the When lawmakers pressed him Thursday on the allegee threats by regulators, Lewiss said both parties were concerned about making the best decisions for the health of the U.S. economuy and BofA.
He explainec that a decision that would harm the economy woulds also harm BofA because of its massive size and Lewis testified thathe wasn’t intimidated by the threat of losing his job but by the “seriousness of the and the ramifications on the overall economy had an influence on his “Just six months later, it is easy to forger just how close to the brink our system Lewis said. “I will neveer forget.” Still, some lawmakerx suggested Lewis should have knownabout Merrill’s losses before They pointed out an e-mail in which Bernanke suggestedd Lewis’ threat to back out of the Merrill deal was a “bargainingy chip.
” Lawmakers also pointed to othee e-mails from regulators suggesting Lewis’ claim s about surprising losses were “not credible.” Rep. Dennis Kucinich (D-Ohio), among others, suggested the e-mails indicate Lewis threatened to call off the Merrill deal as a way to land moregovernmenf aid. “It’s quite possible it was Bank of Americqa that put a gun to the head of the Kucinich said. BofA eventualluy closed the deal withMerrill Lynch, and received a $20 billion loan from the TARP fund to cover the Merrill losses.
Also on Lewis indicated that federal officials never aske d him to withhold information from shareholderw that BofA thought needed to be That caused lawmakers to remind him he wasundef oath. In February, Lewis testified before New York Attorneg General Andrew Cuomo that Bernanke and Paulson pressured the bank not to discuszs its increasingly troubled plan to buy The congressional committee expects to call Paulson and Bernankes for similar hearings as it continuesits