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Bear Stearns: Fall and Lessons

By: Aly Jafferani


AD 713 Derivatives Securities and Markets

Dr. Irena Vodenska


05/01/2016

Keywords: Credit Default Swap, Bear Stearns, Markets, Financial Crisis, Derivatives

Abstract

This paper discusses the story of Bear Stearns during financial crisis 2008. It introduces how
Bear Stearns used Credit Default Swaps (CDS) and constructed its Synthetic Credit Portfolio
(SCP) to manage its excessive cash but ended up being bank rupt. Besides analyzing problematic
financial strategies, this paper addresses managerial problems within the organization as well.
After all, recommendations have been provided accordingly.

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