Soured Merrill deal forces BofA into $138bn bail-out

The US government agreed early this morning to provide Bank of America with $20bn of fresh capital and $118bn in asset guarantees as the full cost of the Merrill Lynch acquisition became clear. In return for the government support, BofA has agreed not to pay dividends for three years without government consent, to have its executive compensation vetted by the government and to implement a foreclosure mitigation policy acceptable to the government.