The Bear Stearns Companies Inc.

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Bear, Stearns & Co. Inc.
Founded 1923
Headquarters New York City, USA
Employees 15,000 globally
Products financial services
Website www.bearstearns.com

Bear Stearns was a New York-based investment bank that collapsed during the 2008 subprime mortgage crisis. It was bought by JPMorgan Chase on March 17, 2008, in a deal totaling $240 million, about 90 percent less than its value the previous week. It had previously been Wall Street's fifth-largest securities firm, with an 85-year history. Shareholders of Bear Stearns received stock in JPMorgan equivalent to about $2 a share, compared with $30 at the close on March 14.[1]

The Federal Reserve extended a $30 billion line of credit to JPMorgan Chase to help it buy Bear Stearns, its former rival. In addition to its own capital, Bear Stearns served as the middleman (or, "counterparty") for billions of dollars in transactions: retirement funds, smaller banks and hedge funds traded through Bear.

The Fed also created a program to give emergency loans directly to the 20 largest investment banks that do business with the Fed and which purchase the majority of Treasury securities, and it lowered the discount-lending rate by a quarter point. It followed that with a cut to the fed funds rate of three-quarters a percentage point.[2]

History

Bear Stearns was founded in New York City by Joseph A. Bear, Robert B. Stearns, and Harold C. Mayer in 1923 with $500,000 in capital. It survived the stock market crash of 1929 without having to lay off any employees, and in 1933 opened a branch in Chicago. That same year the company hired Salim L. Lewis, a former employee of Salomon Brothers, to oversee its bond trading. He eventually became Bear Stearns chairman and chief executive.[3]

In 1955 the company opened its first international office in Amsterdam.

Alan C. Greenberg became chief executive after Lewis died in 1978.

In 1985, Bear Stearns became one of the first brokerages to go public.

Fiscal Year/Annual Reports/Earnings

(Annual reports from 2000 forward [4]; Earnings Releases[5] )

Products and Services

Bear, Stearns' core businesses included:

  • Capital Markets-- This includes equity and fixed income sales, trading, research and investment banking businesses.
  • Wealth Management -- This includes both private client and asset management services.
  • Global Clearing Services


Key People

Registration

References

  1. "JPMorgan Agrees to Buy Bear Stearns for $240 Million ”. Bloomberg.com.
  2. "Fed Moves Highlight Fragile State of Markets". NPR.
  3. A History of Bear Stearns. The New York Times.
  4. "Annual Report”. .
  5. "Earnings releases”. www.bearstearns.com.