A Congressional committee vowed to call Ben Bernanke, the Federal Reserve chairman, and Henry Paulson, the former US Treasury Secretary, to testify after accusing the men of using threats and intimidation to coerce Bank of America (BoA) into buying Merrill Lynch.

Kenneth Lewis, BoA's chief executive, testified today to the House Oversight and Government Reform Committee about the events surrounding the bank's $50 billion, all-stock acquisition of Merrill last year.

Mr Lewis repeated his claims that he was strong-armed into the deal by the US Treasury and the Federal Reserve despite mounting losses at the Wall Street bank.

Emails sent by Fed officials and obtained by the committee backed up Mr Lewis's previous insistence that he was told he would lose his job if BoA pulled out of the acquisition and later needed a Government bailout.

Elijah Cummings, a Democrat member of the committee, said: "If that isn't a threat, I don't know what is?". Jim Jordan, a Republican committee member, said: "This transaction took place in a climate of fear and intimidation by Government officials."

After repeated questioning by the committee, Mr Lewis acknowledged that he had been put under pressure by the Government to buy Merrill but denied that the pressure was improper.

"I'd say they strongly advised and they spoke in strong terms but I thought it was with good intentions," he said.

BoA launched an all-paper takeover of Merrill Lynch in September last year. Mr Lewis said that he became aware in mid-December last year of accelerating losses at the investment bank.

"We contacted officials at the Treasury and Federal Reserve to inform them that we had concerns about closing the transaction," Mr Lewis's testified.

"We considered declaring a material adverse change ... Treasury and Federal Reserve representatives asked us to delay any such action and expressed significant concerns about the systemic consequences and risk to Bank of America of pursuing such a course."

The Government ended up giving BoA a $20 billion bailout to help it absorb the $15.8 billion loss made by Merrill in the fourth quarter.

Edolphus Towns, the Republican who chairs the committee, said that he planned to ask Ben Bernanke, chairman of the Fed, and Henry Paulson, the former Treasury Secretary, to testify about their part in the troubled acquisition in the near future.

Mr Towns said: "Why did a private business deal, announced in September, and approved by shareholders in December, with no mention of government assistance, end up costing taxpayers $20 billion in January?"

Emails obtained by the committee and seen by Dow Jones Newswires ahead of today's hearing illustrate the pressure piled on Mr Lewis by Mr Bernanke and Fed officials to go through with the Merrill takeover.

Fed attorneys called Mr Lewis's arguments against the deal "not credible" and said that the bank chief executive's assertion that he was surprised by Merrill's losses "seems somewhat suspect".

An e-mail from Ben Bernanke, the Fed chairman, described Mr Lewis's threat to abandon the deal as a 'bargaining chip" to obtain more Government assistance. Another Fed lawyer noted that Mr Lewis "can be reckless".

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