Lenient net capital rules caused Bear Stearns

Author: Lynann Butkiewicz | Published: 8 May 2008

Would the sale of Bear Stearns to JP Morgan have been prevented if broker-dealer net-capital rules had been reformed?

Some are arguing that without the change of net capital rules in 2004, the Bear Stearns downfall would not have happened. Under the Securities and Exchange Commission's (SEC) rules, assets don't need...