CHRONOLOGY: The decline and fall of Bear Stearns

NEW YORK (Reuters) - Alan Schwartz, chief executive of Bear Stearns Cos, found himself in big trouble in mid-March.

The company's coffers were draining fast. Customers were leaving in droves and banks were reluctant to trade with what used to be the fifth-largest U.S. investment bank.

JPMorgan Chase & Co's Jamie Dimon ultimately agreed to buy the company at a deep discount, with some nudging by the U.S. Federal Reserve.

In testimony before a Senate Committee on Thursday, Dimon, Schwartz, Federal Reserve Chairman Ben Bernanke, New York Fed President Timothy Geithner and other senior banking and government officials described the events leading up to JPMorgan Chase's March 16 offer, and the aftermath:

--Early in the week of March 10th:

Rumors swirl around Wall Street that European firms have suspended fix income trading with Bear Stearns. U.S. traders begin to stop trading with Bear, hedge funds pull money from prime brokerage accounts, money market funds reduce investment in short-term Bear issued debt. Bear suffers a cash crunch.

--Thursday March 13th:

Bear shares fall more than 7 percent to $57 even as the Standard & Poor's 500 index rises 0.5 percent

Bear calls JPMorgan, its clearing bank, to warn that it might not have enough cash to meet its obligations on Friday and needs emergency help. It also calls the Securities and Exchange Commission and the New York Fed. JPMorgan calls the NY Fed and learns that the Fed already knows situation.

In an evening conference call among the New York Fed, Securities and Exchange Commission, the Fed Board of Governors and the U.S. Treasury, the SEC says Bear Stearns might file for bankruptcy the next morning. The SEC was prepared to spend the evening talking to Bear Stearns about what kind of bankruptcy filing was appropriate.

--Thursday March 13, overnight:

A team from the Fed goes to Bear Stearns headquarters to look at its books. Officials from the Fed in New York and Washington discuss Bear's options and how the damage of its collapse could be contained.

--Friday March 14, 5 A.M.:

The New York Fed, the Fed Board of Governors and Treasury hold a conference call to discuss options. They decide to issue an overnight non-recourse loan to JPMorgan so the bank can then loan money to Bear Stearns. The loan is intended to get Bear Stearns through to the weekend while the companies and government officials explore Bear Stearns' options and find ways to contain any damage.

--Friday March 14th:

Bear Shares fall 46 percent to $30.85, while the S&P 500 drops 2 percent to 1,288.

Credit rating agencies downgrade Bear Stearns debt and customers continue to pull funds to the point where Bear Stearns officials fear the bank will be insolvent by the time Asian markets open on Sunday evening.

--Saturday March 15th-Sunday March 16th:

JPMorgan spends the weekend figuring out if the acquisition of Bear is possible and wise.

--Sunday March 16th, morning:

JPMorgan tells the Fed it could not take on Bear Stearns' risk on its own. Geithner, Bernanke and Paulson agree to help facilitate merger, giving JPMorgan a $30 billion loan backed by $30 billion of Bear Stearns' investment-grade assets.

--Sunday March 16th, evening:

Geithner sends a letter to JPMorgan head Jamie Diamond outlining the financing of the deal.

JPMorgan announces it will acquire Bear for about $2 a share and that the Fed would provide JPMorgan with a $30 billion loan backed by Bear assets. JPMorgan guarantees billions of dollars of Bear trading obligations. The deal is announced just before Asian markets open.

--Monday March 17th, morning:

Bear Stearns shares drop nearly 90 percent to $2.86.

Bear and JPMorgan repay the Fed the $13 billion loan, plus $4 million in weekend interest.

At the request of the SEC, New York Fed examiners assess the condition of all major investment banks.

Questions about the acquisition flood Wall Street. The market is unsure about exactly what JPMorgan is guaranteeing and whether Bear investors would accept the $2 stock price.

--Week of March 17

Rumors abound that Joe Lewis, a major Bear Stearns shareholder, is looking for a bidder to top JPMorgan Chase's offer.

--Wednesday March 19:

JPMorgan's Dimon meets with more than 400 Bear Stearns executives. The meeting is tense and many Bear Stearns employees are visibly angry after having their life savings wiped out. Employees had owned about a third of Bear Stearns' shares. Dimon proposed incentives to employees who stay and support the deal.

--Thursday March 20th - Sunday March 23rd (Easter weekend)

JPMorgan, Bear Stearns and the government revise the deal.

--Monday March 24th, morning

JPMorgan increases its offer for Bear Stearns to about $10 a share and increases its guarantee to cover virtually all of Bear Stearns' obligations. Bear Stearns agrees to sell JPMorgan 95 million shares of new stock, giving JPMorgan 39.5 percent of Bear voting stock. In addition, JPMorgan is to cover the first $1 billion of any Fed loss on its loan.

Bear Stearns' shares rise 76 percent closing at $11.25, the S&P 500 rises 1.5 percent to 1,349.88.

--Thursday March 27

In a filing with regulators, Bear Stearns Chairman James Cayne says he and his wife had sold about $61 million of shares. Many view the sale as Cayne's admission that a higher bid is not coming.

(Reporting by Steven Bertoni; Editing by Andre Grenon)