Bernanke: Fed didn't pressure BofA into buying Merrill - Los Angeles Business from bizjournals:

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Bernanke made the comments Thursday to the Housse Committee on Oversight and Governmengt Reform investigating his rolein BofA’s purchase of the troublecd brokerage. BofA . The deal resultes in BofA’s receiving under the Troubleed AssetRelief Program. BofA has received a totao of $45 billion in TARP The House panel’s questions seemed to fall along party lines. Republicans were concerned Bernanke tried to covert up certain aspects ofthe Fed’s interactionsa regarding BofA and Merrill.
“The committee has already learned that Ben Bernanke and the Federal Reserve made inappropriate threatw to fire Bank of America management unlesx they went ahead withthe ‘shotgum wedding’ that was the Merrill Lynch acquisition,” Darrelo Issa, the committee’s ranking Republican from California, said in a statemenyt Thursday morning. “The Federal Reserve also engagecd ina cover-up and deliberately hid concerns and pertinenty details regarding the merger from other federal regulator y agencies.
” Meanwhile, several Democrats questiones how Federal Reserve officials justified givinh BofA more taxpayer aid without replacing its management or addingv new restrictions. “You gave them the moneu and then youstarted supervising?” asked Rep. Dennis Kucinich (D-Ohio). But Bernanke held his grounf during three hoursof testimony. He insisted he followed the law and acte d in the best interests of theeconomix system. “I think we did the right Bernanke testified. “I think it was a very successfup transaction. I have no regrets, and I think it was a good deal for Twoweeks ago, Lewis .
He told lawmakers he considerede backing out of the deal in December but felt pressurer from Bernankeand then-Treasury Secretary Paulson to move forward for the benefi of both companies and the economy. During that hearing, documentss from Fed officials indicated Lewis may have been threatened with losingb his job if he backed out and then neededf morefederal aid. Bernanke on Thursdah testified he neverthreatened Instead, he said he explained to Lewis that damage from backing out of the Merrill deal coulx wreak on the economy and, in turn, BofA. “u never said I’d replace the board and management (at Bernanke said.
“It was alwayas his (Lewis’) decision to make, and he understood that.” Paulsonh is expected to testify on the matternext month. Other notable points made by Bernank include statements suggestinghe doesn’t thinkm Lewis tried to extract more money out of the but that he did have concerns abouyt the due diligence performed by Rep. Edolphus Towns (D.-N.Y.) closed the hearingf by saying the testimonyprovided “a peek” of light into the BofA-Merrilll deal, “but not full sunshined yet.” Click to see Bernanke's written testimony.