Paulson to Testify on Bank of America-Merrill Lynch Deal
Just a few days after Federal Reserve Chairman Ben Bernanke testified before House lawmakers about his role in Bank of America’s controversial buyout of Merrill Lynch, House Oversight and Government Reform Chairman Edolphus Towns (D-N.Y.) announced that former Treasury Secretary Henry Paulson will be the next official to take the hot seat.
Bank of America purchased Merrill Lynch in December, even after then-BoA CEO Ken Lewis voiced reservations that the buyout would be a bad move for BoA shareholders due to the bad financial shape of Merrill.
Lewis later told New York’s attorney general that federal officials, notably Bernanke and Paulson, had pressured him to go through with the sale. To sweeten the pot, the White House eventually put up $20 billion of Wall Street bailout dollars to catalyze the deal.
Appearing before Towns’ panel last week, Bernanke defended his role in the saga. Paulson will have his chance July 16.