Unlike a regular bank that can use depositors` cash to finance its operations, an investment bank such as Bear Stearns often relied on short-term financing operations (even overnight) known as pension or “rest” transactions. JPMorgan Chase is part of the Dow Jones industrial average and serves millions of U.S. consumers and many of the world`s largest corporate, institutional and government customers among its JPMorgan and Chase brands. For more information about the company, visit www.jpmorganchase.com. Bear Stearns serves governments, businesses, institutions and individuals around the world. The Company`s core business includes institutional equities, fixed-rate assets, investment banking, global clearing services, asset management and private client services. For more information about Bear Stearns, please visit the company`s website at www.bearstearns.com. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements on the benefits of the merger between JPMorgan Chase and Bear Stearns, including future financial and operational results, plans, objectives, expectations and intentions of the combined company, as well as other statements that are not historical facts. These statements are based on the current beliefs and expectations of JPMorgan Chase management and are subject to significant risks and uncertainties. Actual results may differ from those presented in the forward-looking statements. The following factors could, among other things, lead to a change in actual results relative to forward-looking statements: the possibility of obtaining government and self-regulatory approvals on proposed terms and demonnalizations, as well as any changes in the outlook of regulators, responses and commitments made in connection with the merger, and related agreements and agreements; The extent and duration of persistent disruptions to the economy and market economy; unfavourable developments in Bear Stearns` business, including the loss of customers, employees, counterparties and other business relationships; The inability of Bear Stearns shareholders to accept the merger; The risk that businesses will not be successfully integrated; the risk that cost savings and all other synergies resulting from the merger will not be fully realized or take longer than expected; the interruption of the operation is interrupted, making it difficult to maintain commercial and operational relations; Increased competition and its effects on prices, spending, third-party relationships and revenues; The risk of new and changing regulation in the United States and internationally; and exposure to litigation and/or regulatory action. JPMorgan now faces many significant and unknown risks.
Dimon announced this month that the cost of reducing Bear`s assets, litigation and other merger-related costs would increase from an earlier approximate estimate of $6 billion to $9 billion. The JPMorgan Chase guarantee for Bear Stearns` business commitments has also been clearly clarified and extended. For more information, the guarantee agreement will be filed publicly and the parties will provide a question-and-answer document outlining the warranty in more detail on their respective websites. JPMorgan Chase also agreed to guarantee Bear Stearns` loans to the Federal Reserve Bank of New York. The Federal Reserve Bank of New York`s $30 billion special financing related to the transaction has also been amended, so that JPMorgan Chase will bear $1 billion of all losses related to the financing of Bear Stearns` assets and that the Fed will finance the remaining $29 billion to not use JPMorgan Chase.