Senator Chuck Schumer (D-NY) says it is the closest thing to a bank panic we've seen since the Great Depression, so dramatic steps had to be taken.

Worst hit by Bear collapse? Employees, who own 30% of the investment bank.

U.S. Treasury Secretary Henry Paulson said on Sunday he was pleased with the deal forJ.P. Morgan Chase to buy Bear Stearns and with the Federal Reserve's latest actions to enhance market stability.

The combination rescue-fire sale package of Bear Stearns happened so quickly and involves so much unknowns about its balance sheet, analysts struggled to put its role in the credit crunch into perspective.

China's CITIC Securities said on Saturday it could not guarantee it would complete a deal to invest about $1 billion in Bear Stearns given the U.S. investment bank's financial crisis.

Three days before announcing that Bear Stearns' financial situation had substantially worsenend, chief executive Alan Schwartz told CNBC he is not aware of any imminent threat to the Wall Street investment bank's liquidity.

Bear Stearns' Alan "Ace" Greenberg, a former chief executive who currently serves as chair of its executive committee, told CNBC that the liquidity rumors surrounding the company are "totally ridiculous."