Traders sought to "induce panic" over Bear: CEO

WASHINGTON (Reuters) - The head of Bear Stearns Cos told a Senate panel on Thursday that some traders may have sought to whip up concern about the investment bank just before it collapsed last month.

"I would just say as an observer of the markets, it looked like more than just fear. It looked like people wanted to induce a panic," Bear chief executive Alan Schwartz told the Senate Banking Committee in response to questions.

"I always had a concern that the lack of a known liquidity facility for your collateral is something that can cause a problem with the lenders against that collateral. All of us as investment banks lend against high-quality collateral and we turn around and use that collateral," he said.

"I don't think the value of the collateral collapsed. The willingness of people to lend against it just dissipated because of fear," Schwartz added.

(Reporting by Karey Wutkowski, Editing by Chizu Nomiyama,)