Paulson holds his ground

HANK Paulson, the former US Treasury Secretary, defended his role in pressuring Bank of America (BofA) executives to complete the takeover of Merrill Lynch that saved the investment bank.

In a second gruelling day at a hearing over the deal Paulson once again stood firm, stating that allowing BofA to back out of the takeover would have been “unthinkable”.

He said his threats to sack BofA chief executive Ken Lewis if he failed to do the deal were “appropriate”. He said if the bank had pulled out of the deal, that would have threatened the whole financial system.

And he insisted he never attempted to persuade Lewis to keep details of Merrill’s losses secret. “I never, ever suggested to him that he delay any disclosure,” Paulson said.

But Indiana Republican Dan Burton said: “I don’t think anyone is buying what you are saying.”