Merrill Lynch-Bank of America Merger

Ethics is a branch of philosophy that focuses on the moral, philosophical characteristics from formal, systematic and ethical principles. Moral judgments atomic number 18 calculated from ethical principles which need to be apply as a standard for e veryday choices in life and business. This is directly related to the findings human creations make. Cavico (2009) verbalises utilitarianism is to a greater extent than just moral philosophy. It is a mien of renewal and used extensively in g everywherenment decision making. This give be discussed further in the brink of the States-Merrill kill amalgamation. usefulism is considered a scientific system of moral philosophy and non just a philosophical hypothesis of ethical motive. Utilitarian ethics follows the belief of maximizing the sterling(prenominal) advanced for the largest number of people. As utilitarianism is identified, virtuoso postulate to learn that the greatest serious could be base on aggregate principle or a distri notwithstandingive principle. The cuss of America-Merrill Lynch union result be assessed in regards to who, what and how the greater broad(a) will be affected in this uniting. Within utilitarianism, a moral philosophy is developed that focuses on the consequences of ad hoc actions.An action is done, accordingly observed and then analyzed. later identifying all the people that were involved, one needs to subscribe the question, Do the fit of goodly consequences outweigh the sum of the handsome consequences? Quantify all the good and forged consequences in the scenario and if the good consequences are greater than the bad consequences then the action was moral and vice versa. In this paper, the actions of the depone of America-Merrill Lynch spinal fusion will be discussed, evaluated and quantified with the Ric baffling DeGeorge Utilitarian perspective.Pinpointing the s call backholders in this case will pose who was direct and indirectly affected and how they were affected. Furtherto a greater extent, it will be discussed the overall affect it had on society from a planetary perspective, reaction from competitive markets and the economic gust it created within the fall in States and worldwide. Critical points and actions will die hard the course of action on how utilitarian ethics was applied in this state of affairs. Identifying the individual people or assemblages that were in this scenario will be evaluated on a pleasure v. ain scale where it will introduce the extent of good or bad in the situation and the possible out becomes that followed. The pleasure v. upset semblance will then be quantified on a grading scale that represents extreme pleasures and pains in verify of America-Merrill Lynch merger. After totaling up the good and the bad points, it will determine if the actions in this merger were moral. In late 2008, Bank of America and Merrill Lynch were in negotiations for a business share. Bank of America was going to buy Merrill Lynch for one of the largest b each(prenominal) mergers and acquisitions in the world.On the surface, Bank of America thought the merger was a good idea and a good business lead to espouse. Former Chief executive of Bank of America, Kenneth Lewis, and the get on with of Bank of America saying this business accost as a way to expand into different sectors of the financial markets and strengthen umteen of its counter fortunes. With all the extensive financial records of both companies and isotropy sheet assessments, the deal looked great for smooth sailing. Catastrophically, the deal went through and contri moreovered towards a massive failure in our financial markets that affected and crippled everyone worldwide.The private deal that once seemed so good has now locomote a nightmare. All of a sudden, the judicature has stepped in and has announced it will give twenty gazillion dollars in assistance from tax payers bills. Investors and the cosmos were shocke d something of this magnitude was happening and matte up betrayed, cheated and crippled. Within all the mayhem, the actions that will be evaluated come from Merrill Lynch and Bank of America and their failures to disc recede clever financial information that would cook introducen greater losings than expected.United States (2009) stated the lack of transparency to investors and to the public showed that at that place was a negative atmosphere among them that they feared to disclose from the public. In addition to this, rumors circulated that the government had ties to this merger and flexed its power in order to make the merger happen. There were a great amount of people affected in this merger. Merrill Lynch as a social club was beingness bought out in order to be saved financially. Merrill Lynchs investors, shareholders and CEO, John Thain were a part of this corporation.Bank of America was the number one basisdidate for get Merrill Lynch at the time. Bank of Americas in vestors, shareholders and CEO, Kenneth Lewis were all a part of this major merger. United States (2009) includes the Secretary of the Treasury, Hank Paulson and Chairman of the Federal Reserve, Ben Bernanke were on the political side of this merger that apparently knew what was going on and forcefully made Bank of America buyout Merrill Lynch. This merger can also contribute to affecting the superior general public, global economies cross the world and the financial banking industry. As this case develops, there is uncertainty that Merrill Lynch and causality CEO, John Thain, have to reveal massive amounts of losings and at one point a quarter quarter loss of fifteen billion dollars. In response, former CEO of Bank of America, Kenneth Lewis analyzes this and decides it may not be a good idea to pursue the merger. Secretively, the Fed, Paulson and Bernanke force Lewis to buy into the deal because if he doesnt this could create a make do and total meltdown of the financial syst ems.Utilitarian ethics was used by considering the global economy the government had to step in to understate the blow as surpass as they could to benefactor the greater good of society. In addition to this, there has been meditation that if Lewis hides these Brobdingnagian losses before the merger and reveals them after the merger he could gain more government help in regards to the massive get ahead Bank of America now faces. Although the economy is in a meltdown and financial banks are acquiring hit harder than ever before, this merger may attest to save some of our largest financial institutions and lessen the blow of a deal loss for the global economy.On one spectrum of the scale we have the financial banks abusing high leverage investments in order to gain more money without caring about negative consequences but then on the other hand, the nation is faced with minimizing indemnification and deliver as much as it can because in a result of total loss, the public cou ld be in a greater state economic loss. With Merrill Lynch being saved and Bank of America taking on the bigger situation of keeping afloat, Merrill Lynch now has the opportunity to be bought out and saved compared to total die and bankruptcy.In this case, it was a smart move for Merrill Lynch to be acquired by Bank of America and a foreseeable good in the future of the financial markets. Kenneth Lewis took the daunting project of acquiring Merrill Lynch and the bad debt expense that the company brought with it. Acquiring Merrill Lynch would provide a huge blow to Bank of America at outset but restructuring and getting government help in the merger would prove to be a favored task that would provide foreseeable good in the future. Some people believe that Paulson and Bernanke used their governmental power to make this merger happen.Bank of Americas achievement (2009) states they forced Kenneth Lewis to buyout Merrill Lynch and if not Kenneth Lewis and the board of Bank of Amer ica would have been terminated. Although this may have been a threatening action, it was in the governments silk hat interest to make this merger go through or a total collapse of the financial markets would be devastating for the American state and further seep into global chaos. It is a very gawk situation to assess but pursual Utilitarianism considered the greater good of the population and this needed to be done.In addition to this, individual investors were hit very hard with the downturn of the economy. In many cases, people deep in thought(p) more than fifty percent of their investments which sounds terrible but comparing it to a nongovernmental bailout, those individuals would be left with nothing. In this research study, it is needed to define the severity of good and bad consequences for each individual or group that was affected in this case on a numerical grading scale. Each individual or group will be considered according to the Richard DeGeorge Utilitarian approac h.The scale will be ranked from +5 being the best and -5 being the worst situation from a pleasure versus pain standpoint. Merrill Lynch being bought out by Bank of America is more of a good thing. Ranking it at +2 gives Merrill Lynch and Bank of America merger the controlling side because without this merger people would be in greater amounts of trouble. Ranking a +1 for investors and shareholders of each company provides a tyrannical side of this outcome. Although investors did lose over fifty percent of investments into the companies, this loss is repair than losing everything that was invested.Other financial markets were consolidated and restructured. By getting resign of bad assets, other financial institutions could start over and reinvest in the proper markets. This was also a acquire lesson for the financial industry and for them to never repeat these haphazard mistakes again. A rank of +3 will be given to the financial markets. Hank Paul and Ben Bernanke did prove to show excessive force in making this merger happen but only in regards to saving the U. S. economy and limiting the blow that it couldve potentially produced.Giving the government a ranking of +2 shows they provided a punter option for America and the possibility of avoiding a complete financial meltdown. Assessing our global economy by tone anchor at it over the past vanadium years gives it a ranking of 0. This explains that as a country and globally, we have made minimal increases in our economy. peerless calendar month says we are getting back on the right track while the following month says we are slip bying deeper and deeper into recession. The economy shows a recovery in the stock arket one month but the next month there is speculation that the European markets are going to crash and take everyone with them. Living in these highly volatile propagation gives uncertainly and fear for most investors which hinders potential result and recovery. After summing up all the pl easure and pain rankings, the total equals +8. This shows that amidst all the chaos, deceiving and cheating, the outcome created a positive effect that saved our economy as best as possible rather than let it sink and destroy everything.This tragic merger proves to be a morally correct standpoint regardless of the tough actions that were taken in order to achieve this outcome. No individual cheated the system or manipulated the system in order to gain financial strength. It was in the best interest of the individual companies and the U. S. economy to keep them in tact or greater consequences couldve occurred. Saving dickens of our largest banks provides us with a loss in investments but something that would be accepted rather than total and complete collapse of our financial systems.Primary Source United States. (2009). Bank of America and Merrill Lynch How did a private deal turn into a federal bailout? joint earreach before the Committee on Oversight and governance Reform and the Subcommittee on Domestic Policy, House of Representatives, One Hundred Eleventh Congress, first session. Washington U. S. G. P. O. vicarious Source Bank of Americas Acquisition of Merrill Lynch A Shotgun Merger?. (2009, June 16). My Bank Tracker. Retrieved August 4, 2012, from www. mybanktracker. com/news/2009/06/16/bank-of-americas-acquisition-of-merrill-lynch-a-shotgun-merger/