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Thursday, June 25, 2009
Bernanke: I Didn't Pressure BofA Into Merrill Merger
Maybe so. But he essentially created a "bank run" on Wachovia, causing it to fail even though it wasn't insolvent. The Fed said that Wachovia didn't have "enough collateral," so it didn't lend it money. This caused a run that forced the bank to be sold to Wells Fargo. Shareholders of Wachovia ought to be outraged. One of the Fed's main responsibilities--and the reason for its creation--was to prevent bank runs.