According to the Wall Street Journal Wednesday reports, federal officials - notably US Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke - "forcefully urged" Bank of America (BofA) to complete its Merrill Lynch takeover, despite the fact that credit losses at the struggling investment bank were substantial.

In September, BofA's merger deal with Merrill debatably saved it from an almost-certain collapse; and in October, BofA received $25 billion federal aid from out of TARP - Troubled Asset Relief Program.

However, with Merrill's losses mounting by December, BofA CEO Ken Lewis informed Paulson and Bernanke that he was reconsidering the acquisition of Merrill. But, the two officials pushed Lewis to go ahead with the deal, vehemently urging him "not to walk away."

Lewis was warned that if the deal fell through, not only would Merrill be ruined, but the officials' confidence in the bank would also be "undercut." One Federal Reserve official cautioned Lewis that a walk away from the deal would spell unwarranted trouble for BofA, in the sense that a request for additional aid might see the ouster of the Charlotte-based bank's executives and directors, by the regulators.

After about a month of negotiations and an additional $20 billion federal aid - to insure against losses on $118 billion in troubled assets - BofA's acquisition of Merrill finally came through!