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Imagine for a moment that you lent someone $20 billion and he now says, boy, was that a mistake on my part. I would have been better off asking for just 10. Well, stop imagining, because U.S. taxpayers did help out Bank of America to the tune of $20 billion, and the big bank's CEO has said that he now regrets that. Saskia Scholtes covers U.S. financial services for the Financial Times, and she joins us now from New York. Hi.

Ms. SASKIA SCHOLTES (Financial Times): Hi.

SIEGEL: This came up in an interview with Ken Lewis, the CEO of Bank of America.

Ms. SCHOLTES: Yeah. He came into see us at the Financial Times this morning. And we asked him whether he regretted taking the government aid and regretted the deal with Merrill Lynch, and he said he'd wished he'd taken only about half of that amount.

SIEGEL: Does that mean he's about to pay back $10 billion very soon to the Treasury?

Ms. SCHOLTES: Well, no. I think the government wants him to wait a little while before he pays back that money to be sure that there aren't any further losses down the pike. But the reason he did give us for wishing he hadn't taken so much is he said that he had asked the $20 billion in what he described as an abundance of caution because the scale of the losses at Merrill Lynch were getting to a state where they were very worried that the capital hit to Bank of America was going to be huge when the deal closed. But by taking $20 billion, they made the bank look more like Citigroup, and therefore more of a risk of nationalization. He doesn't believe that that was fair.

SIEGEL: So his motive in seeking the aid was for Bank of America to look stronger, and instead it had the reverse effect. It made the bank look weaker.

Ms. SCHOLTES: Yes. That's how he describes it, that it had perverse impact. And then, in fact, the government money in many ways has had a perverse impact. It's been that - you know, the intention was to boost confidence to make people feel more comfortable that the capital levels at these banks were safe, and that instead people have worried, well, these banks need so much government money. Something must be really, really wrong.

SIEGEL: Now another problem with Bank of America's purchase of Merrill Lynch was that it turned out Merrill was paying out a few billion in bonuses - not to mention millions in bathroom redecorating costs - just as it was losing even more billions. Does Ken Lewis express any regret over the very idea of buying Merrill Lynch?

Ms. SCHOLTES: Well, he tried hard not to look at it too much from a short-term perspective. He does admit that in the short term, he was very worried that perhaps Bank of America had overpaid. But he said he tries not to think too much about price and that in the long term, he's very convinced that this is a long-term strategic home run for Bank of America, particularly in the context of acquiring what's known as Merrill Lynch's thundering herd: This army of brokers that they have that allow them to sell Bank of America products now to a huge number of new customers.

SIEGEL: It's - at the time of the acquisition, Kenneth Lewis was being praised as the, well, as the biggest man on Wall Street, otherwise based in North Carolina, but also someone who is creating the new paradigm of the bank - the huge investment financial institution that would have retail investment branches as part of a large bank…

Ms. SCHOLTES: Yeah.

SIEGEL: …still look that way?

Ms. SCHOLTES: Well, of course the irony is that he has been accepting government money to support a deal that creates a banking powerhouse exactly at a time where we are dismantling the banking powerhouse of another era, and that's Citigroup. So I think it's certainly two very difficult situations to contrast. You know, the thundering herd is a big deal for Bank of America. He said this morning that he was supportive of maintaining a real investment banking unit, but I think it remains to be seen whether he really has that commitment.

SIEGEL: And your story and the interview with Kenneth Lewis is in tomorrow's Financial Times?

Ms. SCHOLTES: Yes, it is and it's online now.

SIEGEL: Okay, reporter Saskia Scholtes of the Financial Times, thanks for talking with us.

Ms. SCHOLTES: Thank you.

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