Bear Stearns Bankruptcy

Bear Stearns Bankruptcy

The 2008 collapse of Bear Stearns, a major American investment bank. It occurred because Bear Stearns became overexposed to mortgage-backed securities based on subprime mortgages. As defaults on these mortgages (and therefore investor losses) became apparent in 2006 and 2007, Bear Stearns increased its exposure to this market, which compounded its losses. In March 2008, the Federal Reserve extended the company a loan to try to save it. This effort failed, and Bear Stearns was sold that same month to JP Morgan Chase for $10 per share (down from $133.20 per share less than a year before).
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