Bear Stearns was the U.S. investment bank whose 2008 rescue sale to JPMorgan Chase preceded the global crash’s most severe phase.
Bear Stearns had been one of Wall Street’s largest investment banks and was heavily involved in mortgage-related securities. In March 2008, investors and counterparties became alarmed about its liquidity and ability to obtain short-term financing. The Federal Reserve helped arrange a rescue transaction, and JPMorgan Chase initially agreed to acquire the firm for a very low price.
The deal was later revised to provide greater value to Bear Stearns shareholders. The acquisition closed in May 2008. The episode demonstrated that even a major investment bank could lose market confidence rapidly when its funding depended on fragile short-term arrangements.
Bear Stearns did not file for bankruptcy, unlike Lehman Brothers several months later. Their different outcomes are frequently confused: Bear Stearns was rescued through a sale, while Lehman entered bankruptcy on September 15, 2008.