A top executive of Bear Stearns Cos., which has been hit by the collapse of two of its hedge funds and forced to halt redemptions at a third, shrugged off concerns about a global credit crunch on Thursday and said the recent market decline was healthy.

The bank has not lost clients even after its widely publicized losses and is now focused on catching up with bigger rivals such as Goldman Sachs Group Inc. in markets outside of the United States, said Michel Peretie, chief executive of Bear Stearns International Ltd.

I think it's a healthy correction. We've seen excess in terms of leverage and there was not enough premium for the risk structures, Peretie, who heads the investment bank's Asian and European operations, told a small group of reporters.

The two highly leveraged hedge funds crumbled last month after betting the wrong way on securities backed by U.S. subprime mortgage loans. The third fund halted redemptions this week after jittery investors wanted to pull out their money.

I think it's good that we are going back to more normal financial terms and normal spreads on the credit sides, he said. Personally, I'm cautiously optimistic. I think the market will come back up in the third quarter.

Peretie, on a regular visit to the bank's Tokyo office, said there was no sense of crisis at Bear Stearns and emphasized the bank was on sound footing.

The clients are showing a lot of support to us, he said. If there is any slowdown (in business) it is because we are in summer.

Late summer is typically a slow period for financial markets as many participants are on holiday.

Peretie also said the company was looking to boost revenue from its business outside the United States, currently 20 percent of its total, to as much as 30 percent in the next five years.

Bear Stearns has traditionally lagged rivals such as Goldman Sachs, Morgan Stanley and Merrill Lynch in terms of the size of its international business.

Investors worldwide have been spooked by worries over the sub-prime market problems affecting other markets.

But those fears were overblown, Peretie said.

In my mind it's not contagion, it's normal repricing of excess in the leveraged buy-out sector and the high-yield sector, he said.

He also said the bank remained on good terms with its lenders.

We have a very good relationship with our lending banks and so far there is nothing worrying in that respect.