Congress scrutinizing Bear Stearns purchase by JP Morgan

By: The Associated Press
By: The Associated Press

Lawmakers are looking into the federally backed takeover of struggling investment bank Bear Stearns by rival JP Morgan Chase.

The Federal Reserve is fronting nearly 30 billion dollars to guarantee the deal in what Senate Banking Committee Chairman Christopher Dodd calls an "unprecedented arrangement." The Democrat is asking Treasury Secretary Henry Paulson and others to appear at a hearing a week from today. Dodd says the hearing will cover the Fed's rationale for the deal and the impact on taxpayers.

The top Democrat and Republican on the Senate Finance Committee are also questioning the deal. They've sent letters to the leaders of both firms and government officials seeking more specifics on the transaction and what effect it may have.


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