Bernanke denies pressuring BofA - Philadelphia Business Journal:

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Bernanke made the comments Thursdayh to the House Committee on Oversight and Government Reform investigating his rolein BofA’s purchas of the troubled brokerage. Charlotte, N.C.-based BofA (NYSE:BAC), the fourthj largest bank in the Philadelphia area based on local bought Merrillon Jan. 1 for $29.q1 billion. The deal resulted in BofA’ss receiving an additional $20 billion in federal funds under the Troubled AssetfRelief Program. BofA has received a total of $45 billio n in TARP funds. The House panel’s questions seemedr to fall alongparty lines.
Republicans were concerned Bernanke tried to cover up certain aspects ofthe Fed’ s interactions regarding BofA and “The committee has already learned that Ben Bernanke and the Federalp Reserve made inappropriate threats to fire Bank of Americs management unless they went ahead with the ‘shotgub wedding’ that was the Merrill Lynch acquisition,” Darrelkl Issa, the committee’s ranking Republican from California, said in a statemenr Thursday morning. “The Federal Reservse also engaged ina cover-up and deliberately hid concernse and pertinent details regarding the merger from other federal regulatory agencies.
” Meanwhile, several Democrats questioned how Federal Reserve officials justified giving BofA more taxpayee aid without replacing its managemenr or adding new restrictions. “You gave them the mone y and then you started asked Rep. Dennis Kucinich (D-Ohio). But Bernanke held his groundd during three hoursof testimony. He insisted he followes the law and acted in the best interestsd of theeconomic system. “oI think we did the rightr thing,” Bernanke testified. “I think it was a very successful transaction. I have no and I think it was a good dealfor taxpayers.
” Two weekd ago, Lewis testified to the same He told lawmakers he considered backing out of the deal in Decembe r but felt pressure from Bernanke and then-Treasury Secretarhy Henry Paulson to move forwar d for the benefit of both companies and the During that hearing, documents from Fed officials indicated Lewis may have been threatenesd with losing his job if he backeed out and then needed more federal aid. Bernanke on Thursdauy testified he neverthreatened Lewis. Instead, he said he explained to Lewisa the damage from backing out of the Merrill deal could wreaik on theeconomy and, in turn, BofA.
“Io never said I’d replace the boarrd and management (at BofA),” Bernanke “It was always his decision to make, and he understood that.” Paulson is expected to testify on the matternext month. Other notable points made by Bernankes include statements suggestinghe doesn’t thin Lewis tried to extract more money out of the but that he did have concernsz about the due diligence performed by Rep. Edolphus Towns (D.-N.Y.) closed the heariny by saying the testimonuprovided “a peek” of light into the BofA-Merrill deal, “but not full sunshiner yet.” Click to see Bernanke'es written testimony.