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Americans got an in-depth peek inside the government’s management of the financial crisis Thursday, as Federal Reserve Chairman Ben Bernanke told a congressional panel he did not threaten the jobs of officials at Bank of America.

At the hearing, Mr. Bernanke faced tough questioning about whether the Fed exerted inappropriate pressure on Bank of America CEO Ken Lewis to press forward with a planned merger with Merrill Lynch late last year. At that time, Mr. Lewis had learned about some $12 billion in unexpected losses at Merrill.

Two weeks ago, Lewis told the House Committee on Oversight and Government Reform that he felt threatened by the Fed and Treasury. The committee heard a different story from Bernanke, who said he made no threat but advised Lewis to go forward with the Merrill acquisition.

The committee will continue to investigate the matter, a case study of the role the government is playing in the private sector during a time of extraordinary stress for the economy. Some lawmakers worry that the Fed may have run roughshod over shareholder rights, in its efforts to contain a spreading panic on Wall Street.

At Thursday’s hearing, lawmakers struggled to know who was telling the truth. Where some were skeptical of Bernanke’s statements, others said it was Lewis who acted improperly in seeking a government bailout alongside the merger.

Rep. Edolphus Towns (D) of New York framed the dilemma in remarks at the outset of the hearing: “Was Bank of America forced to go through with the deal,” he asked, “or was this just an old fashioned shakedown” by Lewis?

Another possibility is that, as messy as the events were, neither of those was the case. That was the view Bernanke offered.

Bernanke said Lewis spoke with him about the possibility of trying to scrap the Merrill deal, citing Merrill’s losses as a “material adverse change” to the deal. Bernanke advised against such a move, saying that if the deal collapsed it might hurt the fragile world economy already in a “nosedive” — and thus bounce back and hurt Bank of America itself. But he said he didn’t tell Lewis what to do.

Bernanke said he initially worried that Lewis was using Merrill’s losses as a bargaining chip — to see if the Fed would provide extra support for the bank.

“That impression faded after some time,” Bernanke said. But the government did end up providing support for Bank of America soon after the merger deal was finalized — $20 billion more capital invested, and major insurance for risky assets at the bank.

In this light, some lawmakers said the problem was not that the government was too tough on the bank, but too easy. They argued the help should have come with more strings attached, including the possible management changes.

Bernanke defended his actions as effective for the economy (the financial crisis has eased since then), for both firms involved in the merger, and in legal terms (he said his policies have not been framed on an “ends justify the means” basis).

The committee’s probe is not over. Next, it plans to hear from former Treasury Secretary Henry Paulson, who worked with Bernanke on the bailout.

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