» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 124 | NO. 118 | Thursday, June 18, 2009

Bernanke Invited to Testify on BofA-Merrill Deal

IEVA M. AUGSTUMS | AP Business Writer

Print | Front Page | Email this story | Comments ()

CHARLOTTE, N.C. (AP) - A congressional panel has invited Federal Reserve Chairman Ben Bernanke to testify on June 25 about allegations by Bank of America Corp. CEO Kenneth Lewis that government officials pressed him to buy Merrill Lynch & Co. after Lewis became aware of major losses at the investment bank.

In a letter sent Tuesday, the House Oversight and Government Reform Committee says it is seeking information about what role the Federal government played in the decision to provide the Charlotte-based bank with federal aid to buy Merrill Lynch.

Last week, Lewis testified before Congress defending his rationale in purchasing New York-based Merrill Lynch. Lewis also said publicly for the first time he was pressured into going through with the deal.

A spokesman for Bank of America on Wednesday declined to comment.

Investors have been upset in recent months over a tremendous drop in Bank of America's stock price, continuing losses and ongoing government investigations surrounding the company's acquisition of Merrill Lynch.

In April, shareholders stripped Lewis of his chairman's title, and the bank said it was looking for new directors. Walter E. Massey, president emeritus of Morehouse College in Atlanta, was elected by BofA's board to replace Lewis as chairman.

The bank has since seen four directors leave and has appointed four new ones.

BofA has received $45 billion in government funds since the start of the financial crisis last fall, a portion of which was provided to help the bank manage massive losses from its acquisition of Merrill Lynch.

Last month, the federal government told Bank of America that it should raise $33.9 billion in capital to boost its reserves in case the economy worsens further. As part of its stress tests of the 19 largest U.S. banks, the government said Bank of America needed the most additional cash.

So far, the bank has raised nearly $33 billion and said it expects to top the government's required amount.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog Get more from The Daily News
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 79 146 10,368
MORTGAGES 95 202 13,529
FORECLOSURE NOTICES 19 43 2,687
BUILDING PERMITS 0 393 24,700
BANKRUPTCIES 62 122 10,014
BUSINESS LICENSES 21 37 3,773
UTILITY CONNECTIONS 99 248 14,805
MARRIAGE LICENSES 27 58 3,225

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.