Jimmy Cayne denies blame for demise of Bear Stearns

Jimmy Cayne, the ex-chief executive of stricken investment bank Bear Stearns, today testified in Washington that it was not his fault the bank became the first major institution destroyed in the financial crisis.

Rather than being due to the bank's huge exposure to risky mortgage-related products, Cayne, 76, said the bank's crisis happened simply because of unfounded rumours about its strength.

It is the first public outing for Cayne since he quit just months before Bear was sold to JPMorgan in a March 2008 firesale.

The market's lack of confidence in the firm had been "unjustified and irrational," Cayne said, claiming: "Subsequent events show that Bear Stearns' collapse was not the result of any actions or decision unique to Bear Stearns.

Instead, it was due to overwhelming market forces that Bear Stearns, as the smallest of the independent investment banks, could not resist."

Cayne was vilified during the crisis for taking days off playing golf and bridge while his bank was fighting for its survival.

His successor in the post, Alan Schwartz, today said: "I... believe that we took all the appropriate steps that we could to try to survive the storm that was breaking upon us."