BofA in line for more aid

Bank of America Corp., the biggest U.S. bank by assets, may get more aid from the U.S. government to help absorb losses tied to this month’s purchase of Merrill Lynch & Co., three people familiar with the matter said.

The bank told regulators in December that the takeover might be abandoned because of Merrill’s worse-than-expected results, said the people, who declined to be identified because the talks were private. Federal officials insisted the transaction go forward because the deal’s collapse would have created new turmoil in the financial system, they said.

The talks may add to speculation that Bank of America overreached by rescuing two money-losing companies in six months -- Merrill Lynch in New York and Countrywide Financial Corp. in Calabasas.

The combined company already received $25 billion from the bailout funds. The new aid package is designed to ensure the Merrill Lynch deal gets done, not to save BofA from collapse, one person said.

Bank of America agreed to buy Merrill, the world’s largest securities firm, in a $19.4-billion transaction that came as frozen credit markets helped send crippled Lehman Bros. Holdings Inc. into bankruptcy.