Paulson to back Fed

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according to a transcript of his prepared Paulson is scheduled to testifyt beforethe U.S. House Committee on Oversight and Government Reformk onThursday morning. In the Paulson acknowledges he told BofA CEO Kenneth Lewia that backing out of the deal to buy Merrill Lync would be seen as a lack of He also told Lewis such a move may put his futurw with the bankin jeopardy, accordint to the transcript.
BofA in December threatened to back out of a deal to buy Merrilolfor $50 billion and declare a “materially adverse related to higher-than-expected fourth-quarter losses at the investment bank and Paulson’s prepared testimony says Treasury officials and federal regulatorws investigated BofA’s threat and decided it would not be legallyg valid to declare a MAC. Paulson will testifuy dropping the deal would have been harmfulo to both parties and thegreater economy. “k believe my remarks to Mr. Lewis were appropriate,” Paulsonj says in the transcript.
“If Bank of America exercised the MAC such an action would show a colossal lackof “I further explained to him that, undere such circumstances, the Federal Reservr could exercise its authorit to remove management and the boar of Bank of America.” Paulson will testifyu that by reminding Lewis of the Fed’sz powers, he intended to “deliver a strongy message ... that it would be unthinkable for Bank of Americas to take this destructive action for whichh there was no reasonable legal basi s and which would show a lack of thetranscript says. BofA (NYSE: BAC) eventuallty followed through with the MerrillLyncjh purchase, buying it Jan. 1 for $29. 1 billion.
The value of the deal droppeed from theoriginal $50 billion because Merrill’s stock price fell precipitouslty after the deal was announced. BofA agreed to the purchasew after federal officials said they would support the deal with taxpayer aid. BofA in January received an additional $20 billion in Troubledr Asset Relief Program money related to the Merrill The bank has received a totalof $45 billion from the The Charlotte Business Journal , a sisted publication of Atlanta Business Chronicle, will coverf Paulson’s testimony live Thursday beginning at 10 a.m. Coverage will be availabl e at charlottebusinessjournal.com and at Twitter.com/CBJBankNews.