Bernanke Defends Merrill Lynch Deal
Ben Bernanke, Chairman of the US Federal Reserve, is answering quesitons in Congress today, defending his role in the Bank of America takeover of Merrill Lynch. BofA CEO Kenneth Lewis claims that Bernanke threatened to have him removed if the takeover deal fell apart, a claim which Bernanke denies. Lewis said that he considered invoking the MAC clause (Material Adverse Change) to kill the deal, which led to the series of meetings and calls which are now contested.
Dispensing with the deferential tone usually reserved for Fed chairmen, lawmakers on the House Committee on Oversight and Government Reform interrupted Mr. Bernanke and grilled him on internal Fed emails subpoenaed by the committee and projected on a screen in the hearing room.
He and officers of the Federal Reserve have been accused of forcing the deal through at great cost to taxpayers (who had to put up $20 billion at the close) and to BofA shareholders.
" It is still unclear whether Bank of America was forced by the federal government to go through with the Merrill deal or whether Ken Lewis pulled off what may have been the greatest financial shakedown in a long, long time."