Bank of America's Ken Lewis' testimony sheds some light on the gory details of last year's crisis management. From the WSJ (sub. req.):
Mr. Lewis, testifying under oath before New York's attorney general in February, told prosecutors that he believed Messrs. Paulson and Bernanke were instructing him to keep silent about deepening financial difficulties at Merrill, the struggling brokerage giant. As part of his testimony, a transcript of which was reviewed by The Wall Street Journal, Mr. Lewis said the government wanted him to keep quiet while the two sides negotiated government funding to help BofA absorb Merrill and its huge losses.
The cost of refusing to keep shareholders in the dark might have been his job:
The Wall Street Journal previously reported, in a page-one story on Feb. 5, that Mr. Lewis agreed to proceed with the Merrill merger only after Messrs. Paulson and Bernanke said that he and his board would lose their jobs if Bank of America backed out of the deal. Mr. Lewis's testimony with the New York attorney general's office corroborates that account.
At a time when Bernanke, the Fed and Paulson' replacement at Treasury Tim Geithner are facing charges of weakness and inefficiency its interesting to get the details on their willingness to strong-arm major financial sector players during the crisis.
Update: Bernanke denies any threats to Lewis.