Issa Charges Fed Hid Role in BofA Purchase of Merrill
The Federal Reserve Bank has tried to hide the pressure it applied to Bank of America to buy the faltering investment bank Merrill Lynch, charged Darrell Issa of the House Oversight and Government Reform Committee.
The Fed has deliberately hidden in front of other federal regulatory agencies relevant details related to the merger, said Issa. Fed chief, Ben Bernanke, denied in past exercise of any pressure on Bank of America, the press Thomson Reuters agency says.
Leading Democratic Committee, Edolpus Towns, called Bernanke to testify on this case. Former U.S. Treasury Secretary, Henry Paulson, was also summoned to testify in front of Congress next month about the transaction the Bank of America-Merrill Lynch.
After saving the Bank of America in January giving 20 billion U.S. dollars, U.S. authorities have strengthened the control over it through a secret agreement which has contributed to permanent changes of directors and executives; say sources familiar with the situation.
At least some of the bank’s ratings were reduced by the authorities in the beginning of year, sign of the profound discontents of the administration risk, management and loss. These actions have not been made public by the government or Bank of America, in line with privacy policies that allow banks time to solve problems outside of public attention.