Bank Of America CEO: The Fed Made Me Do It
June 10, 2009 by Tisa Silver
Filed under Finance
Bank of America ended up footing the bill for Merrill Lynch’s transgressions. Why?
According to Bloomberg News, tomorrow, Bank of America CEO Kenneth Lewis will testify to Congress that the Fed made him do it.
As investment banks began to unwind, government and banking officials joined forces to determine how they could keep world financial markets from a total collapse.
The most obvious solution was for the stronger banks to hold up the weaker ones together through a series of fast-paced mergers and acquisitions.
J.P. Morgan was called upon to save Bear Stearns and Bank of America was prompted to buy Merrill Lynch. The move landed BofA execs in hot water after the depth of Merrill’s losses were revealed in the months following the acquisition.
Lewis is scheduled to appear before Congress tomorrow. According to Yahoo! Finance, Lewis’ pre-written testimony was leaked to several media outlets.
I am accustomed to seeing supposedly confidential details of criminal investigations and Hollywood divorce proceedings leaked to TMZ and such. However, I didn’t think I would see the post-M&A testimony of a bank CEO before Congress end up in this category.
The leaked details don’t seem to differ much from Mr. Lewis’ previous stance on the Merrill Lynch acquisition. As such, investors didn’t react much to the breaking news. Shares of Bank of America (Ticker: BAC) closed down two-thirds of a percent today.
BTW- House Republican staffers are backing up Mr. Lewis’ account of the deal.
