What was bear stearns

Despite the tremors on Wall Street that summer, Cayne typically took long weekends to play golf at a country club in New Jersey. The final report of the national commission on the financial crisis concluded that Bear's downfall was caused by its exposure to risky mortgages, heavy leverage and "weak corporate governance and risk management.

The Financial Crisis Inquiry Commission report singled out Cayne, noting that "some senior executives sharply criticized" him. Thomas Marano, who played a critical role in the crisis because he ran Bear's mortgage desk, told the commission that Cayne "played a lot of golf and bridge. Time listed Cayne among the 25 people who are to blame for the financial crisis. Cayne himself has admitted he should have done more in the months and years before Bear's downfall.

I didn't rein in the leverage," Cayne later told Fortune. The financial crisis 10 years later. Cayne, now 84, could not be reached for comment. Before he ascended to the pinnacle of Wall Street power, Cayne worked in various jobs, including selling scrap metal, driving a taxi and selling photocopiers.

But his greatest passion was bridge, and it lured him to New York in the s with the goal of going pro. He even won a national bridge tournament. Cayne's love for the game helped him hit it off with Greenberg during a interview for a job at Bear Stearns. And his tactics did seem to work for many years, as the bank enjoyed enormous success. Friedman, the former senior Bear Stearns exec, said CEOs are like American presidents: They get too much credit when things are going well and too much blame during downturns.

Business Company Profiles. Table of Contents Expand. What Was Bear Stearns? Understanding Bear Stearns. Lehman Brothers' Collapse. Bear Stearns FAQs. The Bottom Line. Key Takeaways Bear Stearns was a New York City-based global investment bank and financial company that was founded in It collapsed during the financial crisis. By the firm's flagship hedge funds were over-exposed to mortgage-backed securities and other toxic assets, which had been purchased with a high degree of leverage.

The collapse of Bear Stearns precipitated a wider collapse in the investment banking industry, which also took down major players like Lehman Brothers. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.

Related Terms Bailout Money Helps Failing Businesses and Countries A bailout is an injection of money from a business, individual, or government into a failing company to prevent its demise and the ensuing consequences. Mortgage-Backed Security MBS A mortgage-backed security MBS is an investment similar to a bond that consists of a bundle of home loans bought from the banks that issued them. What Is a Wirehouse? A wirehouse is a term describing a full-service brokerage firm.

Treasury to mitigate financial market instability. What Is a White Shoe Firm? White shoe firm is an old-fashioned slang term for the most prestigious professional employers. It once referred only to law practices, but now includes other industries. Morgan, of an unspecified amount to keep Bear afloat. By Saturday, J. The Fed lent J. As it turned out, Bear Stearns would be only the first in a string of financial firms brought low by the combination of income losses and diminishing confidence in the market.

In September , Bank of America Corp. William D. But if you see something that doesn't look right, click here to contact us!

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The crime, which was kept secret for nearly two years, later became known as the My Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Table of Contents Expand. Table of Contents. How it Started. The Federal Bailout. Uncovering Fraud. Impact of Bear Stearns' Collapse. By Kimberly Amadeo. Learn about our editorial policies. Reviewed by Robert C. Article Reviewed October 30, Learn about our Financial Review Board.

On December 20, , Bear Stearns announced its first-ever loss. Article Sources.