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SEC Chairman Cox supports the Banking Committee’s plans to updated guidance on liquidity management for banking organizations in light of the recent market turmoil.
In a letter to the BIS Cox underlined “that the events earlier this month leading up to the acquisition of Bear Steams by JP Morgan Chase highlight the importance of liquidity management in meeting obligations during stressful market conditions.”
The letter provides specific information regarding Bear Steams' capital and liquidity positions in the days preceding its transaction with JP Morgan Chase. According to Mr Cox, it shows that this was “a result of a lack of confidence, not a lack of capital.”