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July 16th, 2009
02:32 PM ET

Financial Dispatch: Paulson defends BofA’s shotgun wedding

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Andrew Torgan
CNN Financial News Producer

Former Treasury Secretary Henry Paulson, testifying today before Congress for the first time since leaving office, defended his role in salvaging a controversial deal struck during the height of the financial crisis last fall.

Lawmakers grilled Paulson about whether he overstepped his authority in pushing Bank of America to follow through on its takeover of troubled brokerage Merrill Lynch - a deal which wound up costing taxpayers billions of dollars.

Paulson testified before the House Committee on Oversight and Government Reform, whose members have already questioned the chiefs of Bank of America and the Federal Reserve.

Bank of America's purchase of Merrill Lynch last September was trumpeted as good news, especially when compared to the near-simultaneous bankruptcy of Lehman Brothers.

Yet the deal later nearly collapsed, only to be rescued by billions of taxpayer dollars and government intervention, the full extent of which had not fully surfaced until officials started investigating earlier this year.

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Filed under: Andrew Torgan • Economy