Bear Stearns

About Bear Stearns

Bear Stearns, founded in 1923, was the fifth largest investment bank in the US. The firm was known for its aggressive culture and mortgage expertise. Bear Stearns operated two hedge funds that collapsed in June 2007 due to subprime mortgage losses, an early warning of the financial crisis. In March 2008, a loss of confidence caused a liquidity crisis. The Federal Reserve provided 30 billion in support for JPMorgan Chase to acquire Bear Stearns at 2 per share, down from 172 a year earlier. CEO Alan Schwartz said the downfall was due to rumor and innuendo. The collapse of Bear Stearns foreshadowed the much larger Lehman failure six months later.