House panel eyes Bernanke

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The Associated Press reports. The news comes less than a week beforew Bernanke is set to testify before the Housr Committee on Oversight andGovernmenr Reform. Last week, BofA CEO Kennetbh Lewis testified before the same committee that governmen t officials pressured him to acquire the troubled brokerage late last year in an effory to savethe U.S. The hearing focused on federal officials’ role in BofA’ purchase of Merrill Lynch. Charlotte, N.C.-based BofA BAC) bought Merrill on Jan. 1 for $29.1 billion. The deal resultede in BofA’s receiving an additional $20 billion in federal fundsx under the Troubled Asset Relief BofA has received a totalof $45 billion in TARP funds.
Lewis has been undee intense pressure from BofA shareholders for not disclosing the depthbof Merrill’s financial difficulties before the Merrill lost $15.3 billion in the fourtyh quarter. Lawmakers questioned Lewis on reportas he felt pressured by federal authorities, including Bernanke and then-Treasury Secretary Henr y Paulson, to go aheae with the deal as Merrill’s losses mounted. Lewis testifiedr that BofA contacted officials atthe U.S.
Treasuruy and Federal Reserve in mid-December to inform them that thebank “haxd serious concerns about closing the BofA, he said, was considering declaring a “material adverse change,” which can allow an acquire to back out of a proposed deal. Lewis testifies that Paulson toldhim BofA’s management “would or could” be removedd if the bank backed out of the When lawmakers pressed him on the alleged threats by Lewis said both parties were concerner about making the best decisions for the healthb of the U.S. economy and BofA. He explainesd that a decision that would harm the economy would also harm BofA because of its massive sizeand breadth.
Lewizs testified that he wasn’t intimidated by the threat of losinfg his job but bythe “seriousness of the and the ramifications on the overalll economy had an influence on his “Just six months later, it is easy to forgetr just how close to the brin our system came,” he “I will never forget.”