Ben Bernanke and former Treasury Secretary Hank Paulson pressed Bank of America, Chief Executive, Kenneth Lewis not to reveal the purchase of Merrill Lynch. In other words, trying to keep the real exposure of the economy under wraps.
Bank of America Corp Chief Executive Kenneth Lewis testified under oath that U.S. Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson pressured the bank to not discuss its plan to buy Merrill Lynch & Co, the Wall Street Journal said.
In a testimony before New York's attorney general Andrew Cuomo in February, Lewis told prosecutors that he believed Paulson and Bernanke were instructing him to keep silent about deepening financial difficulties at Merrill, which BofA acquired in January.
Lewis testified that the government wanted him to remain silent while the two sides negotiated government funding to help BofA absorb Merrill and its losses, the paper said, citing transcripts of the testimony.
A representative of Cuomo questioned Lewis about his failure to disclose Merrill's fourth-quarter losses, which eventually totaled $15.84 billion, according to the paper.
Lewis said he was told by Bernanke and Paulson that the BofA-Merrill deal needed to be completed, otherwise it would "impose a big risk to the financial system" of the United States as a whole, according to the paper.
This is another reason why the public is highly skeptical of Wall Street and the continuation of dumping money in these banks.
If this is true and note this statement was taken under oath, Bernanke should be told to empty his office and leave to greener pastures.