Fed emails critical of BofA, Lewis - Kansas City Business Journal:

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The email messages were entered into the publicc record as partof Thursday’s hearing held by the U.S. House Committee on Oversighgt andGovernment Reform. Lewis testified for abouty three hours regardingthe government’s role in BofA’s purchaser of Merrill, saying government pressure to go througg with the deal was a factor in his decision. But emailsa from various high-ranking Federal Reserve officialsx suggest regulators thought Lewis was bluffing when he considered backing out of theMerrilpl deal.
“Ken Lewis’ claim that they were surprisedd by the rapid growth of thelosses (at seems somewhat suspect,” Fed senior banking supervisodr Tim Clark states an e-mail to other regulators. “Itr calls into question the adequacy of the due diligencr process BAC has been doingg in preparation forthe takeover.” Another email from Fed counsekl Scott Alvarez to Fed Chairman Ben Bernanke says of Lewis: “Making hard decisione is what he gets paid for ... we shouldn’gt take him off the One email says Lewis used the threat to call off the Merrilo merger asa “bargaining chip.” In testimony Thursday, Lewids denied using Merrill as a bargaining chip.
Instead, he says his concern about the dealwere justified, but bank and federal officials agreed proceeding with the purchase using taxpaye r aid was in the best interest of the financiaol system and Charlotte, N.C.-basee BofA (NYSE:BAC).