Bank Of America CEO: We Had To Acquire Merrill Lynch To Save The Economy

Are you a Bank of America shareholder who is angry at CEO, (and former chairman of the board) Ken Lewis for going ahead with the Merrill Lynch deal? Well, you’re just mean. It wasn’t his fault. At least, that’s what he’s just testified before the House Committee on Oversight and Government Reform.

Mr. Lewis had previously told the New York Attorney General’s office that he was threatened with a “change in management” if Bank of America backed out of the now-notorious Merrill Lynch merger. Now he says that he went ahead with the deal to save the financial system.

From CNN:

Testifying before the House Committee on Oversight and Government Reform, Lewis said Bank of America nearly backed out of the deal after learning the scope of the losses at brokerage giant Merrill Lynch. But he added that the promise of additional government aid and potential threat to the U.S. financial system prompted the Charlotte, N.C.-based lender to change its mind.

“Even six months later, it is easy to forget just how close to the brink our system came,” Lewis said in his prepared remarks to lawmakers.

Lewis hedged when asked about the pressure he was under from the Federal Reserve, but emails unearthed by Congressional subpoena show Bernanke suggesting to another Fed official that “management is gone,” if the bank backed out of the deal.

BofA’s Ken Lewis defends Merrill deal [CNN]
Live Blogging Ken Lewis’ testimony on the Hill [WSJ]