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Lawmakers Examine Bank Purchase of Merrill Lynch

Officials from the Treasury Department and Federal Reserve pressed Bank of America into purchasing Merrill Lynch last year, the bank's chief executive Ken Lewis told a House committee. Spencer Michels reports on the hearing.

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  • JIM LEHRER:

    Next tonight: two takes on Bank of America's merger with Merrill Lynch, and the questions still surrounding the government's role in that deal. It was the subject of a congressional hearing today.

    And that's where we begin, with "NewsHour" correspondent Spencer Michels.

  • SPENCER MICHELS:

    It was the height of the financial crisis last September, when the hastily arranged takeover of the brokerage firm Merrill Lynch by Bank of America was sealed with a handshake.

    Just two months later, B-of-A and its CEO, Ken Lewis, wanted out of the deal because of deeper-than-expected losses at Merrill Lynch. In January, Merrill revealed over $15 billion in losses, and it was disclosed the government had given Bank of America $20 billion to ensure the deal's completion.

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