If the Fed is going to strong-arm banks, combine with the Department of the Treasury, dictate pay, print money with reckless abandon, muck up markets all over the place, enrich the connected at the expense of those without political pull, and hire Enron PR veterans to sell/con the American people on such damaging shenanigans — activities which clearly characterize its history and present course and therefore true mission — couldn’t it at least stop bankers from making songs like this? One bank, indeed.
The WSJ reports:
The emails confirm Mr. Bernanke was willing to threaten Mr. Lewis’s removal as CEO if he reneged on the Merrill deal and later sought assistance. They also suggest Fed officials had a dim view of bank management, with the Fed’s top lawyer noting at one point that Mr. Lewis “can be reckless.”
The Fed didn’t have an immediate comment.
“These were extremely difficult times in which all parties were working nights and weekends in an effort to prevent a severe financial collapse,” said Bank of America spokesman James Mahoney, “and we believe it involved good people working with good intentions.”
The question of who said what to whom became supercharged earlier this year as a result of testimony provided by Mr. Lewis to New York Attorney General Andrew Cuomo as part of a separate investigation.
Mr. Lewis said then-Treasury Secretary Henry Paulson threatened to remove management and the board if Bank of America did not go through with its purchase of Merrill Lynch.
Mr. Paulson later said he did so in part based on the Fed’s position on the matter.
Mr. Lewis also said Mr. Paulson pressured him to not disclose publicly details about the government bailout talks, and suggested Mr. Bernanke concurred.
Mr. Bernanke later denied pressuring Mr. Lewis over the disclosure issue.
See also “Emails Show Fed Pressure on Bank of America” via the NYT.
What builds trust? What destroys it?
What happens next? What will most concentrate power?
Why do we still pretend?
