Bernanke says Fed acted with 'highest integrity' on Merrill deal
Filed under: Economy
Federal Reserve Chairman Ben Bernanke took his turn today before a Congressional committee investigating last year's acquisition of Merill Lynch by Bank of America (BAC). He told lawmakers the central bank acted with "the highest integrity" in discussions about the deal."I did not play a role in arranging this transaction and no Federal Reserve assistance was promised or provided" to give either company an incentive to go through with it, he said.
At issue is the interplay between Bernanke and Lewis late last year, after Bank of America determined that losses at Merrill Lynch were mounting faster than previously thought. Those losses led Lewis to contemplate exercising a clause in the merger agreement between the companies that would have allowed Bank of America to back away in the event of a "material adverse change" in Merrill's financial condition.
E-mails discovered during lawmakers' investigation revealed that Bernanke and other Fed officials thought Lewis was threatening to invoke the clause as a "bargaining chip" and saw the move as "not credible." Meanwhile, Lewis testified that Bernanke threatened to replace him if he sought to exit the deal.
Bernanke rebutted that claim, saying that he would only have considered taking that step if a decision to scuttle the transaction weakened Bank of America so much that it needed further government assistance.
The testimony could foreshadow some of the questions Bernanke, whose term as Fed chairman ends early next year, will face if President Barack Obama decides to reappoint him.
It seems unlikely Bernanke will back down from his defense of the Fed's actions. "I have nothing that I regret about the whole transaction," he said.
Why is Oprah going to cable? Hint: It's nothing to get teary about
Kisses from Hershey: Candymaker may court Cadbury with $17 billion bid
D-Day for Harry Reid: Can he wrangle 60 votes for Senate health reform bill?
Reader Comments (Page 1 of 2)
6-25-2009 @ 2:24PM
Ethel said...
"Integrity"? I don't believe any one connected to the goverment has a clue what that word means! What did you expect him to say - Oh yes, we pulled our usual arm twisting on them, because you are too dumb to catch on to our fraudulent actions. Has anything been done with 'transparency' or 'integrity' by these people in control?
Don't keep buying the lies they are shoving down our throats. WAKE UP PEOPLE!!!!!
Reply
6-25-2009 @ 10:09PM
RON SKAGGS said...
Bernie is a a bald headed sack of crap liar just like the rest of this socialist administration. These people don't have a clue. Hell ! I'm still trying to find all 57 states Barrack O"bullshit says we have.
Reply
6-26-2009 @ 9:50AM
len said...
Bernie was appointed by Bush. Was Bush a Socialist Admin.? He started all the bailouts?
6-25-2009 @ 9:20PM
AlfredJSenior said...
Oh, Noooooooo..............folks in the Federal government would never, ever be tempted to coerce folks into complying with their wishes.......
Bernanke probably insured his future reappointment by Obama with even the suspicion that he may have willingly used his federal powers to coerce privately held entities into compliance with federal plans.
Reply
6-25-2009 @ 5:20PM
danzillo4 said...
A man who lies under oath as this mutt has, not once but several times is supposed to be charged with PERJURY...
Reply
6-25-2009 @ 5:39PM
ettucat said...
The inbreeding of government workers has reached its' optimum, where we are now left with a bunch of drooling mentally disabled madmen thinking they can do anything and the people will roll over and say thank you. Make note of Iran, all you corrupt and greedy brain-dead in state and federal government. Soon, you will stop being able to divide the people, they will come together,and they will defy the destruction you are wreaking upon this country and its' citizens.
Reply
6-25-2009 @ 5:48PM
marigwanna420 said...
wwhhhaaaaa he bullied me .....
Reply
6-25-2009 @ 6:00PM
MikeW66 said...
These reforms are long overdue. And the mega-banks have to be stabilized, they are too interconnected in the financial system we are all dependent on. After they are well, they should be broken up into smaller pieces so this cannot happen again - -- found a cool site; Balkingpoints ; incredible satellite view of earth
Reply
6-26-2009 @ 12:01PM
bmik6 said...
A large part of the problem with the banking industry lies with earlier government regulations that demanded banks make risky loans to those who could not repay them simply because they are a minority. If the goverment would let the business owners run the business we would be much better off. How many businesses has Obama started? How many has he ran? Has he ever had to make a payroll? Of course not!! So why is he suddenly an expert on business and how they should be managed?
Another point, the media and goverment officials keep saying GM has to make cars that people what and sale more cars. GM has been the largest auto company in the world for many years and only recently became number 2. When you ride ride down the road count the number of GM products you see. More than any other car company. So the claim that they are not selling cars is rediculous. What is killing GM and other manufacters in the USA is government over regulation!!!!
6-25-2009 @ 6:08PM
vinny benfante said...
MR. ben THE BROTHER OF MR. paulson BOTH ARE BORN TO BE liars. THEY BOTH HAD THE stimulus package PASSED SO THEY CAN RIP OFF THE AMERICAN CITIZENS WITH PAYING TAXES FOR THE package. ME AS A AMERICAN CITIZEN, I HAVE NOT A DOUBT IN MY MIND THAT MR. ben IS INVOLVED ALONG WITH MR. paulson IN THIS TRANSACTION THAT TOOK PLACE WITH bank of america & merrill lynch. THEY ARE PART OF THE REST OF THE crooks IN OUR COUNTRY. /////////////// case closed //////////////
Reply
6-25-2009 @ 7:22PM
Lttlrvrt said...
dont leave out TIMOTHY "TAX CHEAT" GEITHNER, HELPED WRITE THE TARP BILL WITH PAULSON AND MR BEN.....I HOPE SOME ONE TRAVELING DOWN I-95 IN SOUTH CAROLINA TAKES DOWN THAT DAYUM SING THAT WAS DEDICATED TO MR BEN..ITS A DISCRACE KNOWN THAT THESES CROOKED GOVERNMENT OFFICIALS CONTINUE TO BE REWARDED FOR THERE FAILURES....YET THE NEW JOB REPORTS ENDING JUNE 20TH SHOWS ANTHER 620,000 HIT THE UNEMPLOYENT ROLES WITH 6 MILLION PLUS RECEIVING UNEMPLOYMENT BENEFITS.
6-25-2009 @ 7:12PM
LMC3959 said...
To all Politicians: Liar, Liar, Pants on Fire. I wouldn't believe you even if your tongue came notorized.
Reply
6-26-2009 @ 8:11PM
chester said...
America ! Don't Be So Ignorant ! ! ! !
Before your own eyes you Americans are being taken down a road of deception & Lies.
I Am from London and very aware of the tactics a goverment uses to literally steal the Peoples Money. Obama has painted a picture of a economic crisis and that He is the only One that can fix it.. LIE . The economy is on the down side But not at a crisis level. His administration is pushing marxist policies that will destroy the USA and you working Americans will pay dearly. Friday they will vote an Cap & Trade and if passes , will cost American families a min. of $2,500 per yr additional to everything else Obama is pushing. Next is Health care & that will cost you a fortune.
Wake Up America ! ! Obama is stealing your $$$$
Reply
6-27-2009 @ 4:39PM
Lttlrvrt said...
As i sit here and watch Mr Bens testomony b4 congress today I noticed there was alot of crackling in his voice when giving answers....and last but not least IM SICK AND TIRED OF THESE GOVERNMENT OFFICIALS USING THE AMERICAN PEOPLE TO JUSTIFY THERE CROOKED ACTIONS.....WE ALL KNOW BoA WAS BULLIED BY TREASUARY DEPT. (ie bernanke/paulson/geithner).
Reply
6-26-2009 @ 2:17AM
Jayhawk said...
Bernanke was very clear, He suggested to Lewis what the natural consequences, ie market co;ssseqnences would be if he used the MAc. C. the eir would be a run on both bank and Merrell , the financial system would further deterioratae, and possible cost the public mre, and people wo;uld w;onder how come ken Lewis and his bo;ard hadn't done enough "due dilligence" to make the deal in the first palce, a relflection o;n the boA boards judgement. TO point out these very probably consequences is not a threat from Bernanke but a threat from reality, of which the banks and invetment houses seemed to have been in denial.
Reply
6-26-2009 @ 8:31AM
tommytortugam said...
L RESERVE FINANCIAL DATA
Leaders of the House Oversight and Government Reform Committee have served a subpoena on the privately owned and controlled Federal Reserve to compel officials at the country’s private central bank to turn over key documents in an effort to get to the bottom of what went on when America’s largest bank purchased a bankrupt Wall Street investment firm.
Rep. Dennis Kucinich (D-Ohio), who chairs the Domestic Policy Subcommittee, has been looking into the circumstances surrounding Bank of America’s acquisition of Merrill Lynch and what role government bailout funds may have played in the transaction.
According to a press release issued by committee chairman Edolphus Towns (D-N.Y.) and ranking member Darrell Issa (R-Calif.), the documents subpoenaed include emails, notes of conversations and other critical evidence.
When Bank of America completed its planned acquisition of Merrill Lynch in January 2009 for nearly $30 billion, the megabank was then eligible for an additional $20 billion in a taxpayer bailout. This brought Bank of America’s total bailout to $45 billion.
Kucinich and Towns want to know the exact details behind what the bank and the Federal Reserve had agreed upon when they arranged the deal in late 2008 to see if there were any backroom dealings promising bank executives additional taxpayer money if they rode to the aid of Wall Street.
During testimony before the House committee on June 11, Bank of America CEO Kenneth Lewis denied that access to more federal funds was the reason why Bank of America helped Merrill Lynch. The Treasury Department and the Fed had persuaded the bank to purchase the insolvent Wall Street firm in a selfless act to help Wall Street, he claimed.
“I believe that committed people of good intentions, in both the private sector and the government, worked desperately hard in late 2008 to prevent a collapse of the global financial system that would have resonated
throughout the global economy,” he said.
But Kucinich was not buying it. At the hearing, Kucinich ripped into Lewis, saying Bank of America took the deal in order to grab more taxpayer dollars.
“Due to the secretive and unaccountable conduct of the Fed throughout its interventions addressing the current financial crisis, many questions about the Bank of America-Merrill Lynch deal and bailout have, until today, remained unanswered,” said Kucinich during the hearing.
“The story of Bank of America’s merger with Merrill Lynch and its huge taxpayer-provided subsidy help to answer broader questions about how the corporate management of very large financial institutions operates with virtual impunity for their mistakes.”
Reply
6-26-2009 @ 8:58AM
Henry said...
this is why we need the goverment to stay out of health care....lie steal cheat.....and bully their way on every part of life.forcing them selfs on us at every turn....just like a rapist...death to the dictator and death to the dictatorship
Reply
6-26-2009 @ 9:26AM
Ol' Joe said...
Learn the truth. Google "Endgame" and be enlightend.
Reply
6-26-2009 @ 9:43AM
Davey Crocket said...
Barney Frank & George W wanted the same thing...let the poor buy a $50K house instead the lenders and Wall Street decided that would not be a big enough profit for their BONUSES so they let pizza delivery guys, with no verfiable income, buy a house for $500K and that is how they made their outragous salaries! The private sector jumped over the governement, wrote & paid for de-regulation (Grahm, Bliley, Leighi bill in 1999) so that the baners, insurance, & investment bankers could make their bonuses, you know the same bonuses paid to Merryl Lynch when the BofA deal went down. We are all suckers and are more interested in going to a basketball game while Wall Street is robbing your house!! Keep up deregualtion, like the Enron Loophole in 2000, so that the Republicans can build their dynasties and keep blaming the Dems...just follow the money and the truth will come out!!!
Reply
6-26-2009 @ 9:49AM
len said...
Bernake was a Bush holdover so then the Bush Admin. was Socialist. They started this Bank bailout. The Banks were nationalized on Oct. of 2008. So, again, the Bush Admin. must have been Socialists right?
Reply