The Tip of the Iceberg: JP Morgan and Bear Stearns (A), Chinese Version Harvard Case Solution & Analysis

Federal Reserve Chairman Benjamin Bernanke, Treasury Secretary Henry Paulson and New York Fed President Timothy Geithner were intent on restraining the impact of the problems of Bear on the wider financial system. James "Jamie" Dimon, Morgan's Chairman and CEO, was in frequent contact with these regulators over the weekend of March 14-16, negotiating potential scenarios for the rescue of Bear, without which Bear would be compelled it to seek bankruptcy protection when markets opened on Monday.

Late on Sunday afternoon, March 16, the board of Bear accepted Morgan's offer to buy Bear for $2 per share, an offer that would not have been made without significant government assistance. There was hope that the Bear rescue would help avert the far-reaching spread of damage into the financial world that is bigger that many policymakers viewed as likely to follow the failure of a major investment bank. This case examines a seminal event in the monetary and economic crisis that started in the summer of 2007, and provides background for understanding the total extent of the disaster as it was shown during the summer and autumn of 2008. It was composed to address two sets of problems. It supplies the opportunity to comprehend the corporate finance problems of capital and liquidity, and of firm valuation. The case allows for the investigation of aspects of the internal and external government of a company, in addition to the challenges of navigating through a crisis when confronted with convincing pressures from competing stakeholders.

The Tip of the Iceberg JP Morgan and Bear Stearns (A), Chinese Version Case Study Solution

PUBLICATION DATE: January 22, 2009 PRODUCT #: 314C22-HCB-CHI

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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