Case Study : The Tip of the Iceberg – JP Morgan Chase and Bear
Stearns
The Global Financial Crisis that took place from 2007 to 2009 was an unprecedented event in global
financial history that began in the summer of 2007 in the US. The fall of Bear Stearns, the fifth largest
investment bank in the US, was a seminal event in the crisis. After 85 years on Wall Street, Bear Stearns
ceased to exist.
You are provided a very well-written case study from Harvard on the frenzied last days of Bear Stearns
in March of 2008. There are many invaluable learning points to draw from the case study that relate to
what we discussed in our lectures thus far in the unit. Importantly, the case study also spotlighted the
contrasting financials of a large well-run commercial bank such as JP Morgan Chase and investment
banks such as Bear Stearns.
Finally, as students of finance, it is imperative to gain some understanding and insight into the global
financial crisis and the lessons of risk management of capital and liquidity.
Format: A4-pages. Font size: Times New Roman 12, 1.5 spacing, keep to normal margins.
Maximum Length: 800 words (Tables, graphs and appendices can be added and are not included
in the word count.). You need not include your references page in the word count.
Reference: Use APA 7 referencing style. https://guides.library.uwa.edu.au/apa
Plagiarism: The University condemns all forms of plagiarism, copying and cheating as unacceptable.
In past years, we had discovered incidents of academic misconduct such as plagiarism and the use of
ghost writers and had taken appropriate and tough actions against such culprits. Please note that the
graders will be reviewing the Turnitin similarity reports diligently.
Q. Why is the Fed so intent on rescuing Bear Stearns?
With the benefit of knowing what
happened through the end of 2008 including the money market fund, the Reserve Fund,
“breaking the buck” and subsequently bailed out by the Fed, provide a critical analysis of the
risks posed to the financial system by shadow banks. (20% of total mark)
5. General presentation, sentence structure, grammar and referencing. (10% of total mark)
(Coherence and clarity of arguments are graded within each question’s allocated mark.)
Final note: Remember the key concepts you have learned in the unit thus far. A good answer is
distinguished by the strength of the arguments which will be supported by evidence (financial
data analysis and anecdotal) from the materials provided and your own sources of research which
must be referenced. There is a wealth of information in the case study and the excel spreadsheet
that can help provide support to your arguments, so examine closely.
