NY Fed bails out Bear Stearns

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.

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.

Tweet This! Share on Facebook

Click here to sign up for the Muckety Newsletter

• Cayne reported leaving CEO job at Bear Stearns - January 8, 2008
• NY Fed’s Timothy Geithner has high-powered mentoring group - June 1, 2008
• Golf and cards consumed too much of Cayne’s final days at Bear Stearns - August 6, 2008
• Mortgage mess sinks Wall Street exec - August 6, 2007
• NY Fed prospect Kevin Warsh already has wealthy connections - January 9, 2009
• The charity work of Bear Stearns’ Alan Schwartz - January 9, 2008
• JPMorgan Chase buys Bear Stearns - March 16, 2008
• Bear Stearns hedge fund case goes to jury - November 9, 2009
• Dimon rides high on JPMorgan report of $2.7 billion profit - July 16, 2009
• JPMorgan Chase to spend $138M on jets, hangar redesign - March 23, 2009