After Bear Stearns, Who May Be Next?

Q: Is this going to happen to other investment banks?

A: Nobody knows for sure, but it could. Until proven otherwise, the market will probably act as if there are more near-collapses to come just as it did on Friday, when investors sold off their bank holdings and sent the Dow Jones industrial average down 200 points.

"Even though Bear was probably on the fringe, pushing the envelope anyway, traders are saying that because it happened, it could happen to somebody else," said Brandon Thomas, chief investment officer for Portfolio Management Consultants, the investment arm of Envestnet.

Q: Which other institutions might need funding?

A: Bear Stearns has been the weakling among the five reigning Wall Street investment banks: Bear, Merrill Lynch, Morgan Stanley, Lehman Brothers and Goldman Sachs. Many market watchers will recall that last spring, Bear was the first of these institutions to reveal big problems with mortgage-linked debt when it had to pump cash into two hemorrhaging hedge funds.

Also, Bear is the smallest of the five big investment banks, the least diversified, and the biggest issuer of mortgage-backed securities.

But Lehman Brothers Holdings Inc. appears to be an investment bank that investors are very worried about right now mainly because it is the investment bank that is most similar to Bear in structure and exposure. Its stock dropped more than 14 percent on Friday.

Banks gave Lehman a vote of confidence of sorts, however, on Friday Lehman Brothers said its new credit facility was "substantially oversubscribed," and that some of world's largest banks participated.

Other banks certainly have their own troubles Merrill Lynch, for one, wrote down more than $14 billion in the fourth quarter as the value of bonds and debt backed by souring mortgages fell.