WASHINGTON — Federal Reserve staff discussed getting a "pound of flesh" from Bank of America Corp. management in return for government aid to help close its deal for Merrill Lynch & Co., internal documents show, highlighting the tense deliberations over the $20 billion rescue eventually provided to the bank.

The documents, unearthed by congressional investigators, show that Fed officials faced skepticism from both inside and outside the central bank on providing government assistance. FDIC Chairman Sheila Bair, writing to Fed Chairman Ben Bernanke just two days before the government aid was unveiled, said there was "strong discomfort with this deal at the FDIC," referring to a plan to have the FDIC backstop losses on Bank of America assets.

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