Charlotte's Bank of America Corp. could receive billions in additional aid from the U.S. government in a bid to shore up its acquisition of brokerage giant Merrill Lynch amid the global credit crunch.
Bank of America, which has already received $25 billion from the government, told the U.S. Treasury Department last month it might not be able to complete the Merrill deal because of Merrill's larger-than-expected fourth-quarter losses, a source familiar with the matter said. Fearing a blow to financial markets if the deal unraveled, the Treasury agreed to work with Bank of America on a plan that includes new government capital, the person said.
The possibility of more government assistance is likely to stir new worries about the bank's health in a city that has already seen its second-biggest bank, Wachovia, acquired by San Francisco's Wells Fargo. Bank of America is in the midst of slashing up to 42,500 jobs worldwide and Wells Fargo is expected to cut its work force here as well.
Details of the government aid, which are still being worked out, could be announced when Bank of America reports fourth-quarter earnings, scheduled for Tuesday. The bank declined comment.
Never miss a local story.
Read the complete story at charlotteobserver.com