Paulson Admits to Threat

Many industry analysts and shareholders wondered what Bank of America was thinking when it went through with its acquisition of struggling financial giant Merrill Lynch. However, former Treasury Secretary Hank Paulson will admit tomorrow at a congressional hearing to informing BofA CEO Ken Lewis that he would oust the executive if Lewis did not go through with the acquisition.
 
After Paulson releases his statements concerning his actions last December that essentially forced Bank of America to absorb Merrill Lynch, Paulson will be faced with questions from committee members. Paulson, however, has expressed his confidence in his actions, stating that everything he said to Lewis was appropriate.
 
According to Paulson, BofA’s acquisition of Merrill Lynch actually had a significant beneficial impact on the economy, as did the federal assistance given to financial institutions across the country. The committee, though, is expected to ask Paulson why the government was so quick to give Bank of America $20 billion while the deal was taking place, suggesting some sort of impropriety.

Hank Paulson with British PM Gordon Brown (Image: Flickr)