Regulators Claim No Involvement in Countrywide Deal

January 11, 2008 No Comments »

A number of financial authorities released statements today, claiming no direct involvement in Bank of America’s merger with Countrywide.

Despite a bevy of rumors alleging that Washington had facilitated the deal between the financial behemoths, regulators denied the claims.

Countrywide’s regulator, the Office of Thrift Supervision, said it monitored negotiations but did not play an active role in the dialogue.

“We were monitoring it,” OTS spokesman Kevin Petrasic said. “We were not participants of the negotiations and did not take an active role in the discussions.”

The Treasury Department said it was “aware of the discussions” between Bank of America and Countrywide, but “was not actively involved”, according to spokeswoman Jennifer Zuccarelli.

An FDIC spokesman declined to comment on the buyout, though one analyst seemed sure they had something to do with the deal.

“The FDIC was protecting their backside,” said Sean Egan, managing director of credit-rating firm Egan-Jones Ratings Inc. “The FDIC did not want to deal with the potential failure of Countrywide.”

“It’s exactly what Countrywide needed,” Egan added. “The company was on a downward slope for the last six months and the fear was that if they didn’t find a savior soon, there would be nothing left to save.”

Analyst Dick Bove of Punk Ziegel & Co. said, “The people in Washington must be having fits about what would happen if a bank or a thrift with $55 billion in assets went under, so I think they pushed Countrywide hard in this direction.”

The Office of the Comptroller of the Currency and the Federal Reserve both declined to comment, but it assumed that everyone is generally pleased with the buyout of the ailing mortgage lender.

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