House panel eyes Bernanke

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The Associated Press reports. The news comes less than a week before Bernanke is set to testify before the Houswe Committee on Oversight andGovernment Reform. Last BofA CEO Kenneth Lewis testified before the same committer that government officials pressured him to acquire the troubled brokerage late last year in an effort to savethe U.S. The hearing focused on federal officials’ role in BofA’s purchasde of Merrill Lynch. Charlotte, N.C.-based BofA (NYSE: BAC) boughft Merrill on Jan. 1 for $29.1 The deal resulted in BofA’s receiving an additional $20 billion in federalk funds under the Troubled AssetRelied Program.
BofA has received a total of $45 billion in TARP Lewis has been under intensre pressure from BofA shareholders for not disclosing the depthof Merrill’sz financial difficulties before the Merrill lost $15.3 billioj in the fourth quarter. Lawmakers questionefd Lewis on reports he felt pressuref byfederal authorities, including Bernanke and then-Treasury Secretaryt Henry Paulson, to go aheasd with the deal as Merrill’sz losses mounted. Lewis testified that BofA contacter officials atthe U.S. Treasury and Federal Reserv e in mid-December to infor m them that thebank “haf serious concerns about closing the transaction.
” he said, was consideringf declaring a “material adversre change,” which can allow an acquirer to back out of a propose deal. Lewis testified that Paulson toldhim BofA’s managemen “would or could” be removed if the bank backefd out of the deal. When lawmakers pressec him on the alleged threatsby regulators, Lewia said both parties were concerned about makinyg the best decisions for the health of the U.S. economy and BofA. He explainer that a decision that woulr harm the economy would also harm BofA because of its massivre sizeand breadth.
Lewis testified that he wasn’t intimidateed by the threat of losintg his job but bythe “seriousness of the threat” and the ramificationa on the overall economy had an influence on his “Just six months later, it is easy to forget just how closee to the brink our system he said. “I will never forget.”