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July 25, 2008 5:25:21 PM CDT

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JP Morgan, Feds Bail Out Bear Stearns

Posted Mar 14, 08 9:25 AM CDT in Business 

(Newser) – Bear Sterns has reached out to rival JP Morgan Chase and the Federal Reserve Bank of New York for emergency funding to reassure investors concerned about the struggling investment bank's deteriorating liquidity, the Wall Street Journal reports. The move is a startling indicator of how hard the subprime virus has hit US credit markets and financial firms.

JP Morgan and the Fed will provide short-term secured funding for up to 28 days, with JP Morgan saying it was working to find permanent or other alternative funding. Bear Stearns has seen its share price plummet 25% in the past month, worsening its capital concerns. “Our liquidity position in the last 24 hours had significantly deteriorated,” said Bear Stearns CEO Alan Schwartz.

Source Wall Street Journal

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The logo for Bear Stearns is shown at its corporate headquarters in New York, in this July 18, 2007 file photo. Bear Stearns Cos., the nation's fifth-largest investment bank, on Wednesday, Nov. 28, 2007...   (AP Photo/Mark Lennihan, file)
A sign of above the entrance to Bear Stearns headquarters is seen in New York Tuesday, Jan. 8, 2008.   (AP Photo/Jin Lee)
A woman holding an umbrella walks past the entrance of Bear Stearns headquarters, Wednesday, Jan. 9, 2008 in New York. Bear Stearns Cos. Chief Executive James "Jimmy" Cayne said Tuesday that he's stepping...   (AP Photo/Jin Lee)
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Wall Street  • subprime crisis  • Bear Stearns  • JPMorgan Chase  • liquidity  • Federal Reserve Bank of New York  • Alan Schwartz


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