Federal Reserve Bank Chairman Ben Bernanke called Bank of America’s threat to pull out of a deal to acquire Merrill Lynch a “bargaining chip,” according to e-mail message exchanges in December, Dow Jones newswires reported citing newly discovered Congressional documents.
Attorneys from the Federal Reserve called Bank of America’s documents “not credible” while the position held by B of A CEO Ken Lewis was deemed not credible, documents which are a part of a congressional investigation by Rep. Edolphus Towns of New York show.
Jeffrey Lacker, the president of the Federal Reserve Bank of Richmond commented in an e-mail that Lewis’ intent to exercise a “material adverse change” clause to exit the deal. His comments add to previous reports that the Federal Reserve pressured Lewis to carry out the Merrill acquisition under threat of losing his job.
“Just had a long talk with Ben ... Says they think the MAC threat is irrelevant because it's not credible. Also intends to make it even more clear that if they play that card and they need assistance, management is gone,” he wrote, according to Reuters.