Bear Stearns collapsed in March 2008 after emergency negotiations during the global financial crisis.
The investment bank had large exposures to mortgage-backed securities and other complex financial products. In March, investors and counterparties rapidly lost confidence, creating a liquidity crisis. The Federal Reserve helped arrange a rescue in which JPMorgan Chase agreed to acquire Bear Stearns, with government support for financing some troubled assets.
The deal was announced on March 16, 2008, and was later revised to give Bear Stearns shareholders a higher price than the original proposal. The episode showed that even a major investment bank could be brought down quickly when short-term funding disappeared. It preceded the September failure of Lehman Brothers by several months and was one of the clearest early warning events of the crisis. Bear Stearns’s collapse is therefore separate from Lehman’s bankruptcy, though both involved mortgage-related losses and collapsing confidence.