Fed e-mails critical of BofA, Lewis - Dayton Business Journal:

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The e-mail messages were entered into the publiv record as partof Thursday’s hearinbg held by the U.S. House Committee on Oversightf andGovernment Reform. Lewis testifiefd for about three hours regardingthe government’sa role in BofA’s purchase of Merrill, sayint government pressure to go througu with the deal was a factor in his decision. But e-mails from varioux high-ranking Federal Reserve officials suggest regulator s thought Lewis was bluffing when he considereed backing out of theMerrill deal.
“Keb Lewis’ claim that they were surprisee by the rapid growth of thelosses (at Merrill) seemxs somewhat suspect,” Fed senior banking supervisor Tim Clark state d an e-mail to other regulators. “It calls into question the adequacyy of the due diligence process BAC has been doing in preparatiom forthe takeover.” Another e-maip from Fed counsel Scott Alvarez to Fed Chairmajn Ben Bernanke said of Lewis: “Making hard decisiond is what he gets paid for ... we shouldn’tf take him off the hook.” One e-maill said Lewis used the threat to call off the Merril l merger asa “bargaining chip.
” In testimon Thursday, Lewis denied using Merrill as a bargaining Instead, he said his concerns about the deal were but bank and federal officials agreed proceeding with the purchass using taxpayer aid was in the best interest of the financial systejm and Charlotte, N.C.-based BofA (NYSE:BAC).