bear stearns
SArajevo School of science and technology
Bear Stearns Collapse 2007
A short analysis
ISMAR HOTA
Table of Contents
Introduction 3
Literature Review 3
Methodology 4
Analysis 5
Introduction 5
About Bear Stearns 6
The Culture at Bear Stearns 6
The Collapse of Bear Sterns 7
The Ethical Issues behind the Bear Stearns Collapse 8
What are subprime mortgages and its Ethical Failures? 8
The Lack of Corporate Governance at Bear Sterns 9
Moral Hazard at Bear Stearns 10
Non Ethical Conduct of the Regulators 11
Conclusion 11
Work Cited 13
Introduction
This paper will presents the demise of Bear Stearns, the fifth biggest US investment bank at the time. It is broken down into two parts, analysis and conclusion. The analysis of this paper presents gives an introduction and overview of Bears Sterns’ with a focus of its culture and what led to its demise in 2007. The second part of the analysis presents the ethical/unethical conduct and analyzes the ethical issues at Bear Stearns as well as the ethical omissions by the regulators of the financial market. This section talks about the ethical dilemmas of subprime mortgage loans, poor corporate governance at Bear Stearns, possible moral hazard at Bear Stearns and the lack of regulation from the state regulators and the SEC. The conclusions of this paper presents the reader with the key learning objectives such as the importance of clear and effective regulatory system to oversee the banks, the importance of the appropriate requirements of capitals that bank possess and the importance of mitigating the investment risks and having a clear strategy.
Literature Review
In order to make an analysis of Bear Stearns’ 2007 collapse this case study reviewed 10 different sources. These sources range from a video interview which was conducted with the former Bear Stearns CEO Alan C. Greenberg, a book review on the book House of Cards by William D. Cohan, a case study on Bear Stearns conducted by Toronto Leadership Center, a number of
Bear Stearns Collapse 2007
A short analysis
ISMAR HOTA
Table of Contents
Introduction 3
Literature Review 3
Methodology 4
Analysis 5
Introduction 5
About Bear Stearns 6
The Culture at Bear Stearns 6
The Collapse of Bear Sterns 7
The Ethical Issues behind the Bear Stearns Collapse 8
What are subprime mortgages and its Ethical Failures? 8
The Lack of Corporate Governance at Bear Sterns 9
Moral Hazard at Bear Stearns 10
Non Ethical Conduct of the Regulators 11
Conclusion 11
Work Cited 13
Introduction
This paper will presents the demise of Bear Stearns, the fifth biggest US investment bank at the time. It is broken down into two parts, analysis and conclusion. The analysis of this paper presents gives an introduction and overview of Bears Sterns’ with a focus of its culture and what led to its demise in 2007. The second part of the analysis presents the ethical/unethical conduct and analyzes the ethical issues at Bear Stearns as well as the ethical omissions by the regulators of the financial market. This section talks about the ethical dilemmas of subprime mortgage loans, poor corporate governance at Bear Stearns, possible moral hazard at Bear Stearns and the lack of regulation from the state regulators and the SEC. The conclusions of this paper presents the reader with the key learning objectives such as the importance of clear and effective regulatory system to oversee the banks, the importance of the appropriate requirements of capitals that bank possess and the importance of mitigating the investment risks and having a clear strategy.
Literature Review
In order to make an analysis of Bear Stearns’ 2007 collapse this case study reviewed 10 different sources. These sources range from a video interview which was conducted with the former Bear Stearns CEO Alan C. Greenberg, a book review on the book House of Cards by William D. Cohan, a case study on Bear Stearns conducted by Toronto Leadership Center, a number of
Cited: Anon, (2014). [online] Available at: http://reason.org/news/show/what-caused-the-meltdown-a-fin [Accessed 20 Dec. 2014]. Digital Age-What Brought Down Bear Stearns?-Alan C. Greenberg. (2010). [video] JimZirinTV. Ferrell, O., Thorne, D. and Ferrell, L. (2011). Social Responsibility and Business. 4th ed. Canada: Cengage Learning, pp.544-545. Greycourt, (2008). WHITE PAPER NO. 44 The Financial Crisis and the Collapse of Ethical Behavior. [online] Available at: http://www.nowandfutures.com/d2/ethics_and_integrity_issues_were_the_cause_WhitePaper044-FinancialCrisis.pdf [Accessed 20 Dec. 2014]. Jill E., F. (2008). The Overstated Promise of Corporate Governance. [online] Available at: https://www.law.upenn.edu/cf/faculty/jfisch/workingpapers/77UChiLRev923(2010).pdf [Accessed 20 Dec. 2014]. Nytimes.com, (2014). Moral hazard tossed out as Fed saves Bear Stearns - The New York Times. [online] Available at: http://www.nytimes.com/2008/03/16/business/worldbusiness/16iht-morg.1.11131999.html?pagewanted=all [Accessed 20 Dec. 2014]. Senseoncents.com, (2014). Book Review: House of Cards by William D. Cohan | Sense on Cents. [online] Available at: http://www.senseoncents.com/2009/08/book-review-house-of-cards-by-william-d-cohan/#more-9391 [Accessed 20 Dec. 2014]. Topics.nytimes.com, (2014). Bear Stearns & Company. [online] Available at: http://topics.nytimes.com/top/news/business/companies/bear_stearns_companies/index.html [Accessed 17 Dec. 2014]. Toronto Leadership Centre, (2014). Case Study on BEAR STEARNS. [online] Toronto Leadership Centre. Available at: http://siteresources.worldbank.org/FINANCIALSECTOR/Resources/02BearStearnsCaseStudy.pdf [Accessed 20 Dec. 2014]. Washingtonpost.com, (2014). 'Moral Hazard ': Why Risk Is Good. [online] Available at: http://www.washingtonpost.com/wp-dyn/content/article/2008/03/18/AR2008031802873.html [Accessed 20 Dec. 2014].