fast forward to citigroup merrill lynch and a very different decision was taken jpmorgan basically cut its credit lines in 2002, 2003 because the pulp structures didn't make much sense. again, a very different decision was made by other banks. and i say that not because i think that jpmorgan was somehow superior beings who had a wonderful insight and geniuses to dodge the dribble, nothing is further from the church, they've made mistakes but it's been each to easy to see all bankers are stupid and risky and somehow what happened wis inevitable and that wasn't the case. one of the things that had become clear to me is how different the banks were in terms of their treatment of some of the risks analysis which

fast forward to ubs, citigroup, merrill lynch, and a very different decision was taken. jpmorgan basically cut its credit lines to sivs in 2002, 2003 because they thought those structures didn't make much sense. again, a very different decision was made by other banks, and i say that not because i think jpmorgan were somehow superior beings and geniuses who have ducked every bullet, nothing could be further from the truth. but it's become far too easy to assume that all bankers were stupid, all bankers were risky. and that was not the case. one of the things that had had become clear to me by doing the research is just how different the different banks were in terms of their treatment of some of the risk analysis which brings me to my crucial point, and this is really where we start to come towards the disaster, if you like, section of the book which is we're now faced with a tremendous choice. clearly, the financial system has imploded to a terrifying degree, and many of the ideologies and principles on which finance has been based in the last three decades stand very d

fess board to citigroup and merrill lynch with a different position taken. similarly jpmorgan basically quds its credit line in 2002 and 2003 because the thought the structure didn't make much sense. again a very different decision was made by other banks. i say that not because i think that jpmorgan was somehow superior alien beings who have wonderful insight in geniuses who dodged a bullet, nothing could be farther from the truth, they make plenty of mistakes true but is become far too easy to see that all bankers are stupid and risky and somehow happened was inevitable. that was not the case. one of the things that became clear by doing research is just how different the different banks or in terms of their treatment of the risks and analysis which brings me to my third point and the crucial point and this is where we come toward the disaster section of the book. which is when we are faced with a tremendous joy is clearly the financial system has imploded to a terrifying degree and many of the ideologies and principles on which finances have been based in

merrill lynch when lehman had been allowed to fail? what was the thinking of saving a.i. g meryl and citigroup when these companies had failed to adequately perform and uphold their fiduciary responsibilities to their stockholders? what made these three different from lehman? >> we made extraordinary efforts to prevent lehman from failing. we were unsuccessful, partly because we could not find a merger partner. bank of america was a potential partner. they decided against it and we didn't try to coerce them to do it. we didn't have the powers to save lehman and that's why they failed, very much -- we were very concerned about it and our concerns proved to be justified. with respect to the other cases, we did everything we could to avoid a systemic failure because of the risks to the system, a.i.g. was possible to address because the large insurance company provided collateral for a loan which allowed us to provide liquidity to the financial products division which was the source of the problem. after the congress passed the t.a.r.p. legislation, it was easier to address these probingdz. if we

citigroup was prevented by government action. in short the pig was one of the short risk for the global economy as well as bank of america and merrill lynch. on december 17th 2008 senior management of bank of america informed the federal reserve for the first time that because of significant losses at merrill lynch for the fourth quarter of 2008, bank of america was considering not closing the merrill lynch acquisition. this information led to a series of meetings and discussions among bank of america, the regulatory agencies and the treasury. during these discussions bank of america ceo ken lewis told us the company was considering invoking a material adverse event clause in the acquisition contract nunez the mack and in its him to rescind its agreement to require merrill lynch. in responding to bank of america and these discussions i express concern that invoking it would entail significant risk not only for the financial system as a whole but also for bank of america itself for three reasons. first, in light of the extreme fragility of the financial system at that time, the uncertainties created by indication of the map but it triggere