House panel eyes Bernanke

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The Associated Press reports. The news comess less than a week before Bernanke is set to testif y before the House Committee on Oversight andGovernmeny Reform. Last week, BofA CEO Kenneth Lewis testifiesd before the same committese that government officials pressured him to acquire the troublec brokerage late last year in an efforf to savethe U.S. economy. The hearing focusedr on federal officials’ role in BofA’s purchase of Merrillk Lynch. Charlotte, N.C.-based BofA (NYSE: BAC) boughtr Merrill on Jan. 1 for $29.1 billion. The deal resulte d in BofA’s receiving an additionapl $20 billion in federapl funds under the Troubled AssetReliecf Program.
BofA has received a total of $45 billionj in TARP funds. Lewis has been under intense pressurd from BofA shareholders for not disclosinb the depthof Merrill’s financiakl difficulties before the merger. Merrill lost $15.2 billion in the fourth quarter. Lawmakersw questioned Lewis on reports he felt pressureds byfederal authorities, including Bernanke and then-Treasurt Secretary Henry Paulson, to go ahead with the deal as Merrill’xs losses mounted. Lewis testified that BofA contacted official s atthe U.S.
Treasurty and Federal Reserve in mid-December to inform them that thebank “hade serious concerns about closing the BofA, he said, was considering declaring a “material adverse change,” whicjh can allow an acquirer to back out of a proposerd deal. Lewis testified that Paulsonj toldhim BofA’s managemenrt “would or could” be remove if the bank backed out of the When lawmakers pressed him on the allegec threats by regulators, Lewids said both parties were concerned about making the best decision for the health of the U.S. economy and He explained that a decision that would harm the economy woulds also harm BofA because of its massivew sizeand breadth.
Lewis testifiecd that he wasn’t intimidated by the threat of losing his job but bythe “seriousnese of the threat” and the ramifications on the overallp economy had an influence on his “Just six months it is easy to forget just how close to the brinkm our system came,” he said. “I will never forget.”