Merrill and BofA’s forced marriage

Did the Fed cross the line by pushing a shotgun marriage of Bank of America and Merrill Lynch?

Bank of America CEO Ken Lewis has taken a lot of heat for agreeing to buy Merrill Lynch last year, said Ed Morrissey in Hot Air, right before Merrill disclosed huge losses. Turns out it wasn’t his fault. According to e-mails released when Lewis appeared before a House panel Thursday, Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson used “extortion and intimidation” to push Lewis to complete the merger, improperly interfering in a private business transaction.

Paulson and Bernanke “strong-armed Lewis”? said David Weidner in MarketWatch. “Good for them.” Maybe they shouldn’t have used “hardball tactics” to save the merger, but the deal had to go through, and smoothly, to prevent a “nuclear blow” to the then-fragile markets. Besides, Lewis is also at fault, for “pulling the trigger on a deal without proper due diligence on a clearly troubled Merrill.”

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