Fed Chairman Ben Bernanke spoke before the US Senate-Banking panel explaining the Bear Stearns- JPMorgan deal. Bernanke said that failure of the bank could have severely shaken confidence.   

Bernanke said, “The failure of Bear Stearns would have lead to a chaotic unwinding of position in those markets and could have severely shaken confidence and the company’s failure would also have cast out on the financial positions of some of Bear Stearns’ thousands of counter-parties and some of them with similar businesses. Given the exceptional pressures of the global economy and the financial system, the damage caused by default by Bear Stearns could have been severe and extremely difficult to contain.”