Bear Stearns was a
(10 May 2010 – USA) Jimmy Cayne, former chief executive of Bearn Stearns, has addressed a US government hearing into the causes of the financial crisis claiming that Bear Stearns was a "big fat goose walking down the lane, about to get eaten alive". Cayne’s analogy suggests that the company was ultimately torn apart by hungry chasing hedge funds.
Cayne was speaking for the first time since the Wall Street bank's demise in March 2008 and speculated that hedge funds and possibly even other banks had conspired to spread rumours that Bear Stearns would make a huge loss in the first quarter of 2008.
Scared by such rumours, Bear's counterparties refused to keep lending it money and with no cash to keep running its business, Bear was bought by JPMorgan Chase in March 2008 for $US1 billion ($1.1bn).
The purchase price represented $US10 per share which equated to a third of what the stock had fetched the previous week. The 85-year-old bank was the first big casualty on Wall Street.
Mr Cayne had been at the helm of Bear Stearns for 15 years and was one of its biggest individual shareholders. He insisted that before its failure the bank had 'ample capital and liquidity' above regulators' requirements and a strong culture of risk management.
Scared by such rumours, Bear's counterparties refused to keep lending it money and with no cash to keep running its business, Bear was bought by JPMorgan Chase in March 2008 for $US1 billion ($1.1bn).
The purchase price represented $US10 per share which equated to a third of what the stock had fetched the previous week. The 85-year-old bank was the first big casualty on Wall Street.
Mr Cayne had been at the helm of Bear Stearns for 15 years and was one of its biggest individual shareholders. He insisted that before its failure the bank had 'ample capital and liquidity' above regulators' requirements and a strong culture of risk management.
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