3-13-18 12:55 PM EDT | Email Article

These days, a big financial firm rescuing another would also have to consider new restrictions on risk-taking. Banks today must pass regulatory tests before paying out profits to shareholders. In that environment, executives may be more reluctant to buy assets from a desperate seller.

Major changes over the past decade might give a failing firm even less time to survive than Bear had.

Today's stock market is far more driven by computer algorithms than by deal-making traders. That means the reaction to any company's struggles is likely to be quicker and more severe. Wall Street executives say that a firm like Bear might have even less time to solve its problems. MF Global Holdings Ltd., a brokerage run by former New Jersey Gov. Jon Corzine, filed for bankruptcy in October 2011 a week after a drop in its debt rating. In August 2012, a group of financial firms came to Knight Capital Group Inc.'s rescue within days of a software glitch that cost the market maker $440 million.

As the last CEO of Bear Stearns, Mr. Schwartz spent his two-and-a-half-month tenure in the top job scrambling the save the firm. He now works at asset-management firm Guggenheim Partners LLC, where was hired to jump-start the firm's nascent investment-banking business. He has found success recruiting senior Wall Street executives whose firms, like Bear, didn't survive the crisis.

Write to Justin Baer at justin.baer@wsj.com and Ryan Tracy at ryan.tracy@wsj.com


(END) Dow Jones Newswires

March 13, 2018 12:55 ET (16:55 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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