Bear Stearns, drowning in debt from its mortgage-related investments, received a lifeline yesterday from the Federal Reserve of New York.
Acting through JPMorgan Chase, the fed provided a line of credit to keep the bank solvent.
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The New York Times reports that the bailout began with a call late Thursday from Bear Stearns CEO Alan D. Schwartz to JPMorgan chief James Dimon. New York Fed president Timothy F. Geithner approved the plan, which is designed to keep the bank afloat until it can right its finances or find a buyer.
Just days before, Schwartz had appeared on TV, trying to calm investors’ fears.
Details about the credit line, including the amount and terms, were not disclosed.
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