Bank of America to retire $45 billion bailout debt in days

Bank of America Corp said it would repay $45 billion of taxpayer bailout funds, it had received under the government's bail out plan. Analysts say the move could free the top US lender from pay curbs even as it is set to hire a new chief, but point out that the move could make it more vulnerable to economic shocks.

Bank of America chief executive Kenneth Lewis

The agreement clinched on Wednesday marks a critical victory for outgoing chief executive Kenneth Lewis. Lewis will relinquish his post by the year end but has maintained that the repayment of the taxpayer funds was something he wanted to accomplish before stepping down.

The deal will also go to raise the profile for corporate America which has taken much flak for the hundreds of billions in taxpayer dollars it had to be helped with during the financial crisis.

The Charlotte, North Carolina-based bank is expected to repay its Troubled Asset Relief Program (TARP) funds in the next few days.

According to a US Treasury official the repayment was a step in the right direction given that replacing Treasury investments with private funds would boost confidence.

According to sources, the deal was negotiated by BofA's chief risk officer, Greg Curl.