Tomorrow Ben Bernanke is testifying on Capitol Hill over the Fed’s role in the merger of Bank of America (BAC) and Merrill Lynch. Specifically, Congressman want to know what kind of pressure the Fed applied to Bank of America to make them go through with the deal and keep Merrill’s losses quiet, against Ken Lewis’ wishes and shareholder interests.
Anyway, it should be must-see-TV, because, via Reuters, ranking Republica Darrell Issa has come out and accused the fed of a coverup, which is incredibly strong language. He also says documents (which had to be subpoenad) reveal that the Fed was always commited to propping up Merrill Lynch, deal or no deal.
Note this comes amid questions over whether Obama will re-appoint Bernanke next year. The market seems to like Bernanke and doesn’t want him to go, but if he’s tarnished it could give Obama the out he needs to put in someone new.
2:06: Issa is currently being pressed on what he means, exactly, by coverup. His answer: Well, there was a matter of a failure to disclose.