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Bank of America to buy Merrill Lynch

WASHINGTON -- Bank of America, the nation's largest bank, swung a deal late Sunday to buy the venerable investment bank Merrill Lynch, the nation's largest retail brokerage, according to sources familiar with the matter.

WASHINGTON -- Bank of America, the nation's largest bank, swung a deal late Sunday to buy the venerable investment bank Merrill Lynch, the nation's largest retail brokerage, according to sources familiar with the matter.

The government-brokered takeover followed a failed plan to rescue Lehman Brothers, which appeared headed for bankruptcy as soon as this morning.

Meanwhile, leaders of American International Group, the nation's largest insurance company, were scrambling to pull together a sweeping restructuring plan to save their firm, sources said.

A global consortium of banks, working with government officials in New York, announced late Sunday a $70 billion pool of funds to lend to troubled financial companies. The aim, according to participants who spoke to The Associated Press, was to prevent a worldwide panic on stock and other financial exchanges.

Ten banks -- Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley and UBS -- each agreed to provide $7 billion ?to help enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets.ร“

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The Federal Reserve also chipped in with more largesse in its emergency lending program for commercial and investment banks.

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