REGULATORS TELL SCHUMER: BEAR STEARNS’ CASH SHORTAGE WAS UNKNOWN UNTIL IT WAS TOO LATE, SHOWING NEED FOR REGULATORY REFORM
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bear stearns, eBay, T-shirt April 4th, 2008REGULATORS TELL SCHUMER: BEAR STEARNS’ CASH SHORTAGE WAS UNKNOWN UNTIL IT WAS TOO LATE, SHOWING NEED FOR REGULATORY REFORM
Washington, D.C. - Under questioning today by U.S. Senator Charles E. Schumer (D-NY) at a Senate Banking Committee hearing, Federal Reserve Board Chairman Ben Bernanke and other top regulators admitted that none of them knew of the liquidity crisis hobbling Bear Stearns until 24 hours before the firm was on the verge of filing for bankruptcy. The regulators conceded that the lack of warning signs showed the need to reform the U.S. financial regulatory system.
Schumer asked Securities and Exchange Commission Chairman Chris Cox, the chief overseer of securities firms, whether he had any advanced notice of Bear Stearns’ cash shortage prior to March 13, the eve of the Fed’s move to extend an emergency line of credit. Cox was unable to indicate he had any knowledge ahead of time.
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