Bear Stearns was the U.S. investment bank whose 2008 collapse prompted an emergency rescue sale arranged with Federal Reserve support.
In March 2008, Bear Stearns faced a rapid loss of market confidence as problems in mortgage-backed securities spread through the financial system. JPMorgan Chase agreed to acquire the firm, with the Federal Reserve providing financing support for troubled assets in the original arrangement.
The deal illustrated how quickly liquidity problems could threaten a major financial institution. It also became an important precursor to Lehman Brothers’ bankruptcy later in the year. Markets initially viewed the rescue as evidence that authorities would intervene to contain systemic risk.
Bear Stearns and Lehman Brothers are often grouped together, but their outcomes differed. Bear Stearns was sold to JPMorgan Chase, while Lehman filed for bankruptcy. The contrast became central to debates about the government’s crisis-management strategy.