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Frontline Breaking The Bank Summary

476 Words2 Pages

Benjamin Errickson

Dr. Neuhauser

Principles of Microeconomics

10/26/15

Frontline’s Breaking the Bank

In Breaking the Bank by Frontline, Ken Lewis, the CEO of Bank of America and Merrill Lynch CEO John Thain show the story of these two CEOs, their banks at the heart of the financial crisis during 2008 while merging their two banks, and the government's new role in taking over the American banking system. In September 2008 when the American economy was on the verge of being broken. Secretary of the Treasury Henry Paulson, John Thain, Paulson’s former protégé, and Ken Lewis, one of the most powerful bankers in the country, secretly cut a deal to merge Bank of America and Merrill Lynch. The merging of Bank of America, the nation's largest bank and Merrill Lynch, the nation's fourth-largest bank that is going bankrupt. The plan was to merge Merrill Lynch and Bank of America and eliminate the …show more content…

Unfortunately, it clear that this plan would not work. Due to this outcome, Paulson was willing to pull millions of dollars from the government to help support the banking system and plunge the nation into a depression. The top bank CEOs summoned an emergency meeting at the Treasury Department where Paulson told the group they had to accept the $125 billion from capital American taxpayers do that the financial system could be saved. At the beginning of this process, Bank of America's CEO Ken Lewis was supportive of the plan but not long after.It was said that the “injection of public capital” was the beginning of unprecedented government involvement in the nation's banking system, with consequences few understood. "I think we nationalized the banks in the U.S. on that day," said Simon Johnson, the International Monetary Fund chief economist. Shortly after, Lewis has discovered the hard truth of what it means to have the government as a partial owner.

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