The WSJ reports on Congressman Edolphus Towns unearthing of emails documents in which the Fed Chief trashes Ken Lewis’ attempt to squirm out of the Merrill acquisition.
Federal Reserve officials sharply criticized Bank of America Corp. and its Chief Executive Kenneth Lewis in emails to each other after the bank tried to pull out of its deal to buy troubled investment bank Merrill Lynch, according to documents unearthed by congressional investigators.
During the December standoff between the big bank and top government officials, Federal Reserve Chairman Ben Bernanke dismissed the threat as a “bargaining chip,” Fed attorneys called the bank’s arguments “not credible” and a top examiner said Mr. Lewis’s own position “seems somewhat suspect. . . ”
The emails confirm Mr. Bernanke was willing to threaten Mr. Lewis’s removal as CEO if he reneged on the Merrill deal and later sought assistance. They also suggest Fed officials had a dim view of bank management, with the Fed’s top lawyer noting at one point that Mr. Lewis “can be reckless.”
Reminds me a bit of what happened to Henry Blodget: He publicly had put buys on certain covered firms, but criticized his firm (Merrill!) for bringing junk public.
Too bad the Fed Chief could not have been more forthcoming about the asshats running Bank of America before we gave them $25 $45 billion plus another $250 billion in guarantees . . .
Emails Show Fed Officials Critical of BofA, CEO Lewis
MICHAEL R. CRITTENDEN
WSJ, June 10, 2009, 4:28 P.M. ET