Fed e-mails critical of BofA, Lewis - Baltimore Business Journal:

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The e-mail messages were entered into the publivc record as partof Thursday’s hearing held by the U.S. Housse Committee on Oversight andGovernment Reform. Lewis testified for abou t three hours regardingthe government’s role in BofA’a purchase of Merrill, saying government pressures to go through with the deal was a factort in his decision. But e-mailw from various high-ranking Federal Reserve officials suggest regulators thought Lewis was bluffing when he considered backinhg out of theMerrill deal.
“Ken Lewis’ claimn that they were surprisedx by the rapid growth of thelosses (at seems somewhat suspect,” Fed senior banking supervisor Tim Clark states an e-mail to othe r regulators. “It calls into question the adequachy of the due diligence process BAC has been doing in preparation for the Another e-mail from Fed counsel Scott Alvarezs to Fed Chairman Ben Bernanks says of Lewis: “Making hard decisionas is what he gets paid for ... we shouldn’tg take him off the hook.” One e-mail says Lewizs used the threat to call off the Merrilp merger asa “bargaining chip.” In testimony Lewis denied using Merrill as a bargainingv chip.
Instead, he says his concernxs about the dealwere justified, but bank and federal officials agreed proceeding with the purchase using taxpayer aid was in the best interes of the financial system and Charlotte, N.C.-based BofA BAC), Greater Baltimore's largest bank.