Bear Stearns boss 'may step down'

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James Cayne, chief executive of Bear Stearns, is reported to be stepping down after sub-prime losses led to the bank making its first quarterly loss.

Bear Stearns has been at the centre of the mortgage debt crisis, which emerged after two of its hedge funds collapsed.

It took a $1.9bn (£959m) charge last year linked to sub-prime loans, which are offered to those with poor credit records or unpredictable incomes.

Mr Cayne is expected to stay on as chairman of Bear Stearns.

He joined the bank in 1969 and has been its chief executive since 1993.

Failed strategy

Newspaper reports say that he has already begun telling board members that he plans to step down.

A number of newspapers and news agencies, including the Wall Street Journal, the New York Times and Bloomberg, are reporting that Mr Cayne is planning to step down this week, and even as early as Tuesday.

"I believe, as I have written for about a year, that Mr Cayne must go," said Richard Bove from Punk Ziegel.

"He was the architect of what now appears to have been a failed business strategy," he added.

The current president of Bear Stearns, Alan Schwartz, has been tipped as a likely successor.

As a result of the mortgage crisis, the value of Bear Stearns shares plunged and the company was forced to look to outside investors, including Chinese investment firm Citic, for support.

In the autumn, the chief executives of Citigroup and Merrill Lynch were dismissed after the Wall Street firms reported huge losses from sub-prime lending.