production are grounds and of course merrill lynch has proved to be a profitable acquisition for bankamerica. why not negotiate a better price, that wasn't the issue that lewis raised. he was talking about breaking off the merger but i think that the walls of be very dangerous because the markets would have been faced with the uncertainty of whether the deal was going to go through merrill lynch would probably not be able to survive absent the support of bank of america said there would have been immediate problem with merrill lynch which would have created broad problems in the financial market. >> even if they threatened to do that in the context of negotiating? >> well, you can't negotiate anything unless you are willing to go through with your threat. and so therefore there would have to be a probability in the mind of market participants that in fact bank of america wouldn't go through. >> you think that would be considered a plus? >> it has been stabilizing as well, yes. >> and in consummating though, the merger as it was originally planned, didn't the bank of america shareholders take

those were issues for bankamerica and shareholders.its second function has to do with oversight regulation. in that capacity i am sure the sec already knew about losses at merrill lynch. from now or perspective the issue was we needed to work with bankamerica to develop a package that would assure the viability of the company in case of financial instability. the bank of america's regulators besides ourselves with the office of the comptroller of the currency and federal deposit insurance corporation whom we involved throughout the process and which i personally spoke to both john dugan and sheila bair to make sure they were informed about the situation. >> you were forthcoming? >> i was indeed appropriate with the other agencies. >> and another e-mail we have obtained recently the head of the fdic says to you there is strong discomfort with the bank of america bailout package and that the fdic board does not want to do this. mr. bernanke, what were the concerns at the fdic about the bank of america's bailout, and why did you and the t

the record clearly shows you did believe there would be systemic consequences if bankamerica took steps to back out of its deal with merrill lynch perspective when in court. so did the threat of mac which you believe would have serious consequences influence your willingness to give bankamerica's financial assistance when you didn't believe it needed to have it? >> we demonstrated if we saw a major institution about to fail and risk the stability of the financial system we would try to take steps to stabilize it so we would have done that in any event. >> i just want to conclude with this point. mr. bernanke has testified he was concerned about systemic collapse. we all understand that. he's concerned about think of america, we understand that and he said bankamerica would hardly be a good thing for investors, that was your testimony but if the fed do merrill lynch was feeling before the shareholders voted, why did you not inform the sec? >> if they knew about it, if you knew about before you approved the merger why did you approve the merger? >> the $14 billion of losses that mr. lewis

this includes chrysler, general motors and of course bankamerica and merrill lynch. i am also deeply concerned that going forward, if the systemic risk proposal by the president, which would give a vast authority over any entity, a bank or otherwise, that represents a potential systemic risk is to be given to an agency and if mr. chairman, that is to be the fed and if that power is used, what will be the oversight? what will be the consultation? how will we know that although the fed has the lead, will the sec, the occ and other agencies charged with their responsibilities always be kept informed? i appreciate today mr. chairman that not everyone on the day as agrees that the focus is on what was done behind closed doors relating to this merger. others may say, and it is their prerogative, that the question is what did the officers and directors of these companies do? i for one am also interested to hear that but today primarily i would like to understand how we can have statements made by government officials be so different and what the evidence provided today to u

bankamerica has been doing it in preparation for the takeover. in short, the treasury department has provided $20 billion for a shotgun wedding. the question may be, who was holding the shotgun? @ today's hearing, we hope to better understand what happened when the merger was announced, and when the public found out that the company had received $20 billion in taxpayer money. we will be looking for answers to some puzzling questions. why did a puzzling bit -- why did a public business deal approved in december with no mention of government assist

. >> do you believe bankamerica had a responsibility to inform its shareholders and the american people that was going to get another injection of $20 billion from the united states government? earlier than january 20 if? >> that was bankamerica's decision and counsel. >> i was asking you. >> i'm not a lawyer. >> do you think you have a responsibility as the head of the fed to tell the american people we were going to inject another $20 billion into the bank of america earlier than january 20 of? >> my responsibilities are set up by the stabilization act which says after the completion of the deal we must report within a week which we did. >> so you don't think you had any -- in hindsight, hindsight is always 20/20. is their anything you would do different? >> i think it was a successful transaction and stabilize markets and put the two companies back on a healthy path and protected our economy and it was a good deal for taxpayers. i think i have nothing that i regret about the whole transaction. i think it was a very successful operation over all and it achieved a public policy objecti

for bankamerica corp. it was the harshest public grilling since the late 1990's. also in "the washington post," the headline, "bernanke holds firm in hot seat." some of the broadest criticism in its modern history over its failure to prevent the financial crisis and its central role in the government response. the incision is provided more than $1 trillion to prop up what in for injured financial firms. members of both parties increase in one of the fed subjected to greater congressional oversight, and there is broad skepticism about an administration proposal to expand the fed responsibilities." in the financial times today, they discuss bernanke, whether or not president barack obama will reappoint him to another term as fed reserve chief. he writes, "barack obama should to now this noise when deciding to reappoint mr. bernanke when his term despite -- expires in january. for now the u.s. central bank deserves praise. it often lead from the front globally in tackling the escalating financial crisis. if mr. bernanke ends up on one term, it should be on the basis

just recently she helped oust and less as bankamerica's chairman.[applause] and that effort is part of a growing campaign for regulation of the financial industry and at the same time she serves on president obama's economic recovery advisory board. anova knows a lot about inside and outside strategy is to win a real change and how have to change to win so please welcome anna burger. [applause] >> conwell >> thank you and it is great to be here. this is an incredible panel it is a long time coming. we have worked hard, tramp about being able to salvage as about how to have american futures now not some way, "healthwatch" that actually changing america's future now so i'm excited to have this discussion with all of you. it was a year ago that we came to this conference to take back america and we did it. the stakes are high back then a one at the last conference and i was even before the economic collapse, that was all about green corruption in the bush administration that cared about the top 1 percent in not anybody else and so i want to officially

liability will be whether he knew or reasonably should have known the magnitude of the losses when bankamerica made its disclosure to get the shareholder vote on the merrill lynch deal in early december. mr. lewis, did bank of america supplement the proxy solicitation it sent to shareholders that the cover -- company learned in mid november about the rapidly mounting losses at merrill lynch before the shareholder vote on december 5. losses at merrill lynch before the shareholder votes on december 5th? >> congressman, if we take disclosure very, very seriously. if any -- >> were there supplements? >> if anybody in our legal group had suggested we do anything of that nature, we would have done it. >> there were no supplements, isn't that right? >> no suggestions to have a supplement. >> there were no supplements. okay. mr. lewis, look at the following e-mail that circulated on december 23rd, 2008. ", i think he's worried about stockholder suits. knows they did not do a good job of due diligence and issues facing the company are finally hitting home and worried about his own job after cutting loo

the primary cause of the problems and thought merrill lynch's losses were more significant than bankamerica was experiencing. the government even thought that you are making the threat to move mac as a bargaining chip. the government had already given you $25 billion before you approached it about merrill lynch. if the government believed all of that about you and your management team, were you surprised that the fed arranged for you to receive an additional financial support in january? it did that surprise you? financial support in january, does that surprise you? >> we received 15 billion, not 25 billion from the original t.a.r.p. package. it did not surprise me they were willing to give us more. we talked about coming to a solution to get the merrill lynch deal done. >> there was a financial crisis and they thought it was necessary -- unanimous consent for twoore minutes. >> without objection. >> there was a financial crisis and they thought it was necessary for the system, for the deal to go through. if there's one thing about your record that's clear, you have experienced negotiating

one of the first things to say in your background is, bankamerica announced an agreement. i did not play role in arranging this transaction in the federal reserve assistance was promised are provided in connection with that agreement. is that accurate, yes or no? >> yes. >> albright. then you go want to talk about all the things it did do. i am confused. let's talk about this whole situation with one of the things you did. this is your statement. it says, responding to the bank of america in the discussion, i, talking about yourself, expressed concern in invoking the mac would until significant risk and then you go on to talk about that. we had mr. allyssa testified before us that he has been an experienced guy in this whole banking stuff for many years. he took this mac situation very seriously and then paulson comes along and you come along, and your own testimony and you say you know, i don't think that you are right on this. but basically it sounds like you did not believe in the competence of mr. lewis. i'm just finding this out today. is that right? did you think he

merrill lynch last september but at the time of that acquisition because of several relationships, bankamerica actually also bought black rock which now owns the majority share of bank of america. recently, that had to do with interrelationship between black rock and merrill lynch, as you know. recently the fed just hired black rock to execute at least four contracts, maybe five, to analyze and handle the troubled assets of at freddie mac and fannie mae, making black rock the dominant player in pricing these distressed assets. i am concerned that a black rock and its chief executive officer may not be fair and impartial in conducting these responsibilities because they in fact had been heavily involved in and venting, creating and trafficking in those instruments for most of the last two decades. indeed during the risk analysis associated with them and selling billions of them to the government of the united states. so one of my questions, mr. bernanke, is do you know what your mr. fink sold his first tranche to, do you know what your that occurred? >> i do not. >> you think that's important f