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Bank head: I was pressured to buy Merrill

June 11, 2009 at 7:41 PM   |   Comments

WASHINGTON, June 11 (UPI) -- Bank of America head Kenneth Lewis told a U.S. House committee Thursday officials threatened to oust him if he did not complete a merger with Merrill Lynch.

Members of the House Committee on Oversight and Government Reform questioned Lewis about e-mails laid out in a memorandum prepared by Republican staff members, The New York Times reported. The e-mails suggested Federal Reserve Chairman Ben Bernanke and Henry Paulson, then secretary of the treasury, were the ones pressuring Lewis.

Bernanke and Paulson are expected to be the next witnesses, the report said.

Merrill proved to be in far worse financial condition than previously believed. But the Bank of America deal averted the kind of chaos that occurred when Lehman Brothers was allowed to collapse.

Bank of America could have invoked a clause allowing it to withdraw from the deal because of a "material adverse change" in conditions. Lewis said he was motivated not by concern for his job but because the threat showed how determined the government was that the deal should be completed, The Hill reported.

© 2009 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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