{"page":"\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/resources-572d6a42.css\" /\u003e\n\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/lp_boclips_stylesheets-f4d0de30.css\" media=\"all\" /\u003e\n\u003cdiv data-title='Bernanke with Bear Sterns and JP Morgan chiefs testify before Senate Banking Committee' data-url='/boclips/videos/5c54c552d8eafeecae16f57d' data-video-url='/boclips/videos/5c54c552d8eafeecae16f57d' id='bo_player_modal'\u003e\n\u003cdiv class='boclips-resource-page modal-dialog panel-container'\u003e\n\u003cdiv class='react-notifications-root'\u003e\u003c/div\u003e\n\u003cdiv class='rp-header'\u003e\n\u003cdiv class='rp-type'\u003e\n\u003ci aria-hidden='true' class='fai fa-regular fa-circle-play'\u003e\u003c/i\u003e\nVideo\n\u003c/div\u003e\n\u003ch1 class='rp-title' id='video-title'\u003e\nBernanke with Bear Sterns and JP Morgan chiefs testify before Senate Banking Committee\n\u003c/h1\u003e\n\u003cdiv class='rp-actions'\u003e\n\u003cdiv class='mr-1'\u003e\n\u003ca class=\"btn btn-success\" data-posthog-event=\"Signup: LP Signup Activity\" data-posthog-location=\"body_link_boclips\" data-remote=\"true\" href=\"/subscription/new\"\u003e\u003cspan\u003e\u003cspan\u003eGet Free Access\u003c/span\u003e\u003cspan class=\"\"\u003e for 10 Days\u003c/span\u003e\u003cspan\u003e!\u003c/span\u003e\u003c/span\u003e\u003c/a\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-body'\u003e\n\u003cdiv class='rp-info'\u003e\n\u003cdiv aria-label='Hide resource details' class='rp-hide-info' role='button' tabindex='0'\u003e\u0026times;\u003c/div\u003e\n\u003ci aria-label='Expand resource details' class='rp-expand-info fai fa-solid fa-up-right-and-down-left-from-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003ci aria-label='Compress resource details' class='rp-compress-info fai fa-solid fa-down-left-and-up-right-to-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003cdiv class='rp-rating'\u003e\n\u003cspan class='resource-pool'\u003e\n\u003cspan class='pool-label'\u003ePublisher:\u003c/span\u003e\n\u003cspan class='pool-name'\u003e\n\u003cspan class='text'\u003e\u003ca data-publisher-id=\"30356011\" href=\"/search?publisher_ids%5B%5D=30356011\"\u003eCurated Video\u003c/a\u003e\u003c/span\u003e\n\u003c/span\u003e\n\u003c/span\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-description'\u003e\n\u003cspan class='short-description'\u003eWashington, DC - 3 April 20081. Federal Reserve Chairman Ben Bernanke walks into Senate hearing2. Cutaway of Senate Banking Committee3. SOUNDBITE: (English) Ben Bernanke, Federal Reserve Chairman: \"Our financial system is extremely...\u003c/span\u003e\n\u003cspan class='full-description hide'\u003eWashington, DC - 3 April 2008\u003cbr/\u003e1. Federal Reserve Chairman Ben Bernanke walks into Senate hearing\u003cbr/\u003e2. Cutaway of Senate Banking Committee\u003cbr/\u003e3. SOUNDBITE: (English) Ben Bernanke, Federal Reserve Chairman: \u003cbr/\u003e\"Our financial system is extremely complex and interconnected, and Bear Stearns participated extensively in a range of critical markets. The sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence. The company's failure could also have cast doubt on the financial positions of some of Bear Stearns' thousands of counterparties and perhaps of companies with similar businesses. Given the exceptional pressures on the global economy and financial system, the damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain.\"\u003cbr/\u003e4. Wide side shot of Senate panel\u003cbr/\u003e5. SOUNDBITE: (English) US Senator Chris Dodd, Banking Committee Chairman (D-Connecticut):\u003cbr/\u003e\"Was this a justified rescue to prevent a systemic collapse of financial markets or a 30 billion (b) US dollars taxpayer bailout, as some have called it, for a Wall Street firm while people on Main Street struggle to pay their mortgages?\"\u003cbr/\u003e6. SOUNDBITE: (English) US Senator Robert Menendez, D-New Jersey:\u003cbr/\u003e\"How do we continue to look at struggling homeowners in the eye when we pull out all the stops to help a sinking ship on Wall Street but homeowners are still adrift at sea, drowning in foreclosure?  The Bear Stearn crisis reared its head and it was solved in a matter of days. The foreclosure crisis has been going on for a year with no end in sight, and both pose I think significant, if not equal threats to our economies.\"\u003cbr/\u003eAP Television\u003cbr/\u003eNew York, NY - Recent\u003cbr/\u003e7. Exterior shot of Bear Stearns investment bank\u003cbr/\u003e8. Close up of Bear Stearns sign on building\u003cbr/\u003e9. Close up of Bear Stearns logo\u003cbr/\u003eWashington, DC - 3 April 2008\u003cbr/\u003e10. SOUNDBITE: (English) Robert Steel, US Treasury Undersecretary:\u003cbr/\u003e\"The focus was not on the specific institution, but on the more important strategic concern of the implications of a bankruptcy.  The failure of a firm at that time that was so connected to so many corners of our markets would have caused financial disruptions beyond Wall Street.\"\u003cbr/\u003e11. Wide side shot of committee hearing \u003cbr/\u003e12. Mid shot of Senate panel\u003cbr/\u003e13. SOUNDBITE: (English) Jamie Dimon, Chairman and CEO of JP Morgan:\u003cbr/\u003e\"Bear Stearns would have failed without this effort and the consequences could have been disastrous.  The idea that a Bear Stearns fallout would have been limited to a few Wall Street firms just isn't so. People all over America - union members, retirees, small business owners and our parents and children - are now invested in the financial system through pensions, 401Ks, mutual funds and the like. A Bear Stearns bankruptcy could well have touched off a chain reaction of defaults at other major financial institutions. That would have shaken confidence in the credit markets that already have been battered.\"\u003cbr/\u003e14. Cutaway of Senate panel\u003cbr/\u003e15. Side shot of Dimon and Schwartz at witness table\u003cbr/\u003e16. SOUNDBITE: (English) Alan Schwartz, President and CEO of Bear Stearns:\u003cbr/\u003e\"Before unfounded rumours began circulating in an already precarious credit market leading to the run on Bear Stearns, the company had adequate capital and liquidity and a book value of approximately 12 billion (b) US dollars. Facing the dire choice of bankruptcy or a forced sale under exigent circumstances, we salvaged what we could to avoid wiping out our shareholders, bondholders and 14,000 employees.\" \u003cbr/\u003e17. Wide side shot of hearing\u003cbr/\u003eFederal officials testifying on Capitol Hill on Thursday defended their actions to prevent the failure of Wall Street's Bear Stearns by quickly arranging a sale last month to banking giant JP Morgan Chase. \u003cbr/\u003eThey said to have done anything else would have sent shockwaves through the financial system.\u003cbr/\u003eTestifying for a second straight day on Capitol Hill, this time before the Senate Banking Committee, Federal Reserve Chairman Ben Bernanke said the Fed's emergency loans to Bear Stearns were necessary to avert a meltdown in the entire US financial system.\u003cbr/\u003e\"Given the exceptional pressures on the global economy and financial system, the damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain,\" Bernanke told lawmakers.\u003cbr/\u003eThe Fed Chair was the top witness at a hearing called to examine whether the Fed was justified in providing up to 30 (b) billion US dollars to facilitate the sale of Bear Stearns Cos. to JP Morgan Chase \u0026amp; Co.\u003cbr/\u003eThe nation's fifth largest investment bank became the biggest victim of a severe credit crunch that has roiled markets since last August and made it harder for consumers and businesses to get credit.\u003cbr/\u003eDemocrats on the Senate Banking Committee asked whether big investment banks were getting preferential treatment compared to millions of Americans having trouble paying their mortgages.\u003cbr/\u003e\"Was this a justified rescue to prevent a systemic collapse of financial markets or a 30 (b) billion US dollars taxpayer bailout for a Wall Street firm while people on Main Street struggle to pay their mortgages?\" Committee Chairman Christopher Dodd asked at the beginning of the hearing.\u003cbr/\u003eNew Jersey Senator Robert Menendez added, \"How do we continue to look at struggling homeowners in the eye when we pull out all the stops to help a sinking ship on Wall Street but homeowners are still adrift at sea, drowning in foreclosure?\"\u003cbr/\u003eBernanke said that if Bear Stearns had been allowed to fail, it would have led to a \"chaotic unwinding\" of Bear Stearns investments held by individuals and other financial institutions.\u003cbr/\u003eHe testified on a panel that also included Treasury Undersecretary Robert Steel, Christopher Cox, chairman of the Securities and Exchange Commission, and Timothy Geithner, the head of the Fed's New York Regional Bank.\u003cbr/\u003eSteel underscored Bernanke's remarks, telling the committee, \"The failure of a firm that was connected to so many corners of our markets would have caused financial disruptions beyond Wall Street.\"\u003cbr/\u003eAlso appearing before the committee were Alan Schwartz, the head of Bear Stearns, and Jamie Dimon, the head of JP Morgan, who described marathon sessions at both firms as executives searched for the best way out of the Bear Stearns liquidity crisis.\u003cbr/\u003eSchwartz told the panel that Bear Stearns was brought down by \"unfounded\" market rumours that led to what was essentially a \"run on the bank\" as Bear Stearns creditors began demanding payment out of fears the company was about to collapse.\u003cbr/\u003e\"Facing the dire choice of bankruptcy or a forced sale under exigent circumstances, we salvaged what we could to avoid wiping out our shareholders, bondholders and 14,000 employees,\" he said.\u003cbr/\u003eDimon took issue with reports that the Fed had taken Bear Stearns' riskiest securities as collateral for the 30 (b) billion US dollars loan that the central bank made to facilitate the sale. He also maintained that a Bear Stearns bankruptcy would have been \"disastrous\" for the financial system.\u003cbr/\u003e\"A Bear Stearns bankruptcy could well have touched off a chain reaction at other major financial institutions that would have shaken confidence in credit markets that already have been battered,\" Dimon said in his testimony. \u003cbr/\u003eMany economists believe the credit and housing problems already have pushed the country into a recession.\u003cbr/\u003eBernanke, testifying before the congressional Joint Economic Committee on Wednesday, raised the prospect of a recession for the first time since the current slowdown began. \u003cbr/\u003eHe said it was possible that the overall economy may not grow at all during the first half of this year.  However, he continued to predict that growth will resume in the second half of 2008.\u003cbr/\u003e\u003c/span\u003e\n\u003c/div\u003e\n\u003cdiv class='action-container flex justify-between'\u003e\n\u003cbutton aria-expanded='false' aria-label='Read more description' class='rp-full-description' type='button'\u003e\n\u003ci class='fai fa-solid fa-align-left'\u003e\u003c/i\u003e\n\u003cspan id='read_more'\u003eRead More\u003c/span\u003e\n\u003c/button\u003e\n\u003cdiv class='rp-report'\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003cdiv aria-labelledby='resource-details-heading' class='rp-info-section'\u003e\n\u003ch2 class='title' id='resource-details-heading'\u003eResource Details\u003c/h2\u003e\n\u003cdiv class='rp-resource-details clearfix'\u003e\n\u003cdiv class='detail'\u003e\n\u003cdl\u003e\n\u003cdt\u003eCurator Rating\u003c/dt\u003e\n\u003cdd\u003e\u003cspan class=\"star-rating\" aria-label=\"3.5 out of 5 stars\" role=\"img\"\u003e\u003ci class=\"fa-solid fa-star text-action\" 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