JP Morgan and NY Fed to fund Bear Stearns

Source: Exec Digital USA

Date :3/14/2008 10:33:16 AM

JPMorgan Chase has today said that it will join with the Federal Reserve Bank of New York to provide temporary funding for Bear Stearns.

The credit crisis seems to have stepped up a gear as the leading financial institution has sought assistance after a week of persistent concerns about whether it could continue to meet its obligations.

The bank said it was in talks with New York-based JPMorgan 'regarding permanent funding or other alternatives.'

Bear Stearns maybe the smallest of the Wall Street big five, but it is the second-largest underwriter of U.S. mortgage bonds, and investors has been rushing to escape. The bank has been trading at $30.20 a share, down 47 percent.

Intercession

According to reports, Bear has been unable to borrow from other dealers, leading to the intervention by the Federal Reserve.

“We have tried to confront and dispel these rumors and parse fact from fiction," CEO Alan Schwartz said in a release.

"Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated. We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations."

March 14, 2008