America’s strongest bank and now the world’s largest bank, the Bank of America, received an additional $20 billion of the U.S. federal government’s bailout fund.

Additionally, the government will be providing guarantees on $118 billion in assets to assist in the absorption of it’s recent acquisition of Merrill Lynch.

The $20 billion comes at a cost of an equal value of preferred stock with an 8 per cent dividend to the Treasury, as well as limitations on executive compensation and a federally mandated mortgage loan modification program.

“The investment was made under the Targeted Investment Program. The objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security. Separately, the FDIC board announced that it will soon propose rule changes to its Temporary Liquidity Guarantee Program to extend the maturity of the guarantee from three to up to 10 years where the debt is supported by collateral and the issuance supports new consumer lending. With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy. As was stated in November when the first transaction under the Targeted Investment Program was announced, the U.S. government will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks,” says the joint release by the U.S. Department of Treasury and the Federal Reserve

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