What happened to Bear Stearns?
The fate of Bear Stearns in the United States during the mortgage crisis on Subprime has provoked a large number of public comments and concerns. Within one month, the value of the company's shares from nearly $ 100 per USD (USD) to $ 2, in a sharp decline, and the company feared that it would have to start bankruptcy, as it would have to be assessed that the US economy was in the order that it had become serious problems in 2008. and Company, Inc. It was founded in 1923 on a stock shop. In 2007, Bear Stearns had a number of branches, including several hedge funds, and it was an incredibly popular and successful company, while shares were sometimes almost as high as $ 200 per share. The company was awarded in billions and employed nearly 14,000 people. Podláns to obtain a loan of one of its high -risk investment branches. The company concluded agreements with several other investment companies to lend to a loan, using secured debt obligations that prove to be underestimatedOcene. As a result, shareholders have become concerned about the liquidity of the company and many have tried to withdraw their investments and try to escape from great loss; Some investors eventually ended up with severe losses and in August 2007 caused a lawsuit.
lawyers responsible for the action claimed that Bear Stearns mislead their investors; Within a few days the co -chairman resigned and the belief in Bear Stearns was seriously shaken. At a time when the company desperately needed liquidity to manage its growing financial problems, investors fled from it, causing a massive decline in profits, resulting in a company's downgrade on the list of standard and poor.
in March, 2008, it was clear that Bear Stearns had serious problems. On 14 March, JPMorgan and the Federal Reserve Bank agreed to extend the temporary loan of the company, which caused a large number of public comments. Many criticsIt pointed out that some Bear Stearns managers were not even present for this agreement, suggesting that these individuals did not take this problem seriously. On 16 March Bear Stearns concluded an agreement on the merger with JPMorgan Chase, which allowed Chase to obtain the company in the exchange of shares. The announcement that Bear Stearns shares were awarded at only $ 2 USD was a share of the share, even for people who followed the problem.
The fate of the bear stearns illustrates the far -reaching effects of the mortgage on the mortgage and the risk of high -risk loans and investments. This caused the federal reserve system to reconsider several key policies and led to a general agreement that the financial market regulations need to be seriously adjusted to cope with the target of the market. Many such regulations dated to the beginning of the 20th century, a very different time in the world of investment and wealth management.