Fed approves BofA, Countrywide purchase
June 6, 2008
The Federal Reserve has approved the purchase of Countrywide by Bank of America. Not surprising really - at this point the Fed will probably approve the purchase of any bank by another just to save the public from “BANK FAILURE” headlines. While the acquisition is approved there has been some rumblings that Bank of America is not quite sure whether they’ll complete the transaction; but so far all signs and sounds coming from BofA point to moving forward.
From Market Watch:
The Federal Reserve said it approved Bank of America’s planned acquisition of mortgage lender Countrywide Financial late Thursday.
The Fed said Bank of America pledged to operate the combined mortgage operations under the bank’s “polices, internal controls, and other risk-management systems.”House prices have fallen further since January, while mortgage markets and other credit markets have been severely jarred by the near collapse of Bear Stearns and downgrades of bond insurers.That’s increased concern about whether Bank of America will complete its purchase of Countrywide at the original terms. However, the bank has repeatedly stressed that it stands behind the deal.Many commentators urged the Fed to reject the deal, in light of lawsuits and investigations surrounding Countrywide.
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