Former Fed Official Call Bear Stearns Deal "the worst policy mistake in a generation"

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Why hold back feelings? Vincent Reinhart, former head of monetary affairs at the Federal Reserve called the deal to save Bear Strearns (BCS) by backing a sale to JP Morgan (JPM) was "the worst policy mistake in a generation," according to The Wall Street Journal.

He argued that the Fed had several other options such as taking a "tougher line" with J. P. Morgan; cultivating other suitors; selectively removing certain assets from Bear’s portfolio; or accelerating implementation of the Fed’s new offer to temporarily swap U.S. Treasury from its portfolio for Bear’s less liquid assets, the paper reported.

Douglas A. McIntyre