Friday 26 June 2009

Too big to fail...

Is there something rotten in the Kingdom of the US ?
FED president had to testify before Congress on the mater of Bank of Amercia’s acquisition of Merrill Lynch and whether or not the Federal Reserve pressured BofA CEO Ken Lewis into going through with the deal once due diligence showed up much bigger than expected losses at Merrill.
If you want to read this testimony, you can find it here.
What really happened is that BofA wanted to dump the Merrill deal and was then told by the FED not to do it. Even if this would cause problems for the bank.
The emails relating to the specific intention to not tell the SEC what was going on by senior Fed officials was very damning. Bernanke's pathetic response that he didn't know what this senior Fed official was doing, and that he was operating on his own in his stated intention to keep the SEC in the dark is either an admission of a complete failure of leadership.
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