Don't miss

Replay


LATEST SHOWS

EYE ON AFRICA

Ahmed Kathrada's funeral highlights divisions within the ruling ANC party

Read more

MEDIAWATCH

It's Not EU, It's Me

Read more

BUSINESS DAILY

Markets muted as UK begins Brexit proceedings

Read more

THE DEBATE

'Thank you and goodbye': Clock starts on Brexit negotiations (part 1)

Read more

THE DEBATE

'Thank you and goodbye': Clock starts on Brexit negotiations (part 2)

Read more

ENCORE!

Film show: 'Ghost in the Shell', 'The Confession' and Jean Rouch centenary

Read more

FOCUS

Italy: Anti-establishment mayor of Rome faces grim reality of power

Read more

MIDDLE EAST MATTERS

Refugees of rap: Using music to speak out about the Syrian war

Read more

THE POLITICAL BRIEF

Rise of populism: Could far-right leader Le Pen be France's next president?

Read more

Fed approves JPMorgan buyout of Bear Stearns

Latest update : 2008-04-02

The US Federal Reserve on Tuesday said it had approved JPMorgan Chase's proposed takeover of Bear Stearns and acknowledged the "emergency" of the situation. (Report: P. Hall)

The US Federal Reserve on Tuesday said it has approved JPMorgan Chase's proposed takeover of Bear Stearns, two weeks after it was announced, explaining the exceptionally short delay was due to the "emergency" of the situation.
   
"The Board has determined that an emergency exists requiring expeditious action on the proposal," the Fed said in a statement.
   
In a Fed-backed move last month, JPMorgan Chase rescued investment bank Bear Stears from collapse under mounting losses from soured real estate-related investments.
   
The Fed said that JPMorgan Chase had requested the central bank board's approval to acquire indirect control of Bear Stearns Bank & Trust (BSB&T), a subsidiary of The Bear Stearns Companies Inc.
   
JPMC proposes to acquire more than 25 percent of the voting shares of Bear Stearns and then merge Bear Stearns with a newly formed subsidiary of JPMC, with Bear Stearns as the surviving entity, it said.
   
The Fed board said it had provided notice to the primary federal and state supervisors of BSB&T and the Department of Justice and that none had objected to the transaction.
   
Fed chairman Ben Bernanke and other officials are set to testify at a US Senate panel hearing Wednesday on the Bear Stearns takeover that has raised concern among lawmakers about the government's unusual role in the rescue.
   
JPMorgan Chase hiked its offer for Bear Stearns on March 24 to 10 dollars per share, or over one billion dollars, quintupling a fire-sale price agreed a week earlier for the distressed investment bank.
   
The Federal Reserve Bank of New York has pledged 29 billion dollars of taxpayer money to finance the deal in return for 30 billion dollars' worth of Bear Stearns assets, including ailing mortgage-backed securities.
   
The portfolio of distressed Bear Stearns assets will be managed by BlackRock Financial Management on behalf of the Fed which will accrue any gains or losses from the portfolio.
   

Date created : 2008-04-02

COMMENT(S)