Henry Paulson forces Bank of America to complete Merrill deal

According to New York Attorney General Andrew Cuomo’s letter summarizing the results of his investigation to regulators and legislators, the government threatened to remove Bank of America Chief Executive Ken Lewis and the management and board of directors of the Bank, if it didn't go through with its acquisition of struggling investment bank Merrill Lynch.

This shows how aggressive the Treasury and the Fed have been in trying to stabilize the financial system in the face of the worst credit crisis and recession for decades. Hank Paulson, Treasury Secretary at the time, told Lewis that if Bank of America pulled out of the Merrill deal, that would create "systemic risk," which usually refers to a damaging domino effect in which the collapse of a major financial institution leads to more failures, Cuomo said in the letter.
The revelations may also lead to Lewis’s step down as some shareholders have been calling for it on the threshold of Bank of America's annual meeting on April 29. CtW Investment Group is calling for Bank of America shareholders to vote against Lewis, lead director O. Temple Sloan and governance committee chair Thomas Ryan at the meeting.
A Bank of America spokesman didn't immediately commented Cuomo letter on Thursday afternoon. However, Cuomo said that Lewis admitted that Paulson's threat "changed his mind" about pulling out of the Merrill deal.