Page 187 - Bank Case Studies

The Financial Melt-down

As part of the Troubled Assets

Relief Program (TARP) BofA had

initially received $25 billion in
October 2008. It was then

pressured to take over the
vulnerable investment house of

Merrill Lynch, to forestall its
collapse after it had announced an $8 billion write-down in

2007. For taking it over BofA received an additional $20

billion in January 2009 ostensibly to help it absorb Merrill.

Shareholders of both companies had approved the

acquisition on December 5, 2008, and the deal was

completed on January 1, 2009 even though Merrill had

reported a loss of more than $15 billion in the fourth

quarter of 2008.

In January 2009, The

Wall Street Journal
reported that the Bank

of America was
operating under a

secret

End of 2008 - Ref: (19)

Diagram 3