BofA To Receive $15B In New TARP Money
Professor Kenneth E. Scott is quoted in a Fox Business story about Bank of America Corp's request for additional government funding to finalize its acquisition of Merrill Lynch:
Bank of America (BAC: 8.37, -1.81, -17.78%) will receive at least $15 billion in additional bailout money from the U.S. government to help complete its merger with Merrill Lynch, a source told FOX Business on Thursday.
The extra money for BofA, according to various media accounts, suggests the bank’s Chief Executive Officer Kenneth Lewis may have underestimated the potential damage that may still lie ahead related to Merrill’s huge investment in bad real estate securities.
“It’s not reassuring,” Kenneth Scott, a professor of law and business at Stanford Law School and former general counsel of the Federal Savings and Loan Insurance Corp., told Reuters. “There are more losses to be realized, but the question is the extent to which they are already reflected in values that banks are recording on their books.