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Mortgage securities back Fed loan to Bear Stearns

The securities backing a $29bn (€18.6bn) Federal Reserve loan to Bear Stearns consist primarily of "mortgage-backed securities and related hedge investments," the US Treasury Department said.

The disclosure, in a letter to the Senate Finance Committee staff, is the first official comment on the securities behind the controversial loan, made March 16 to facilitate JP Morgan Chase's takeover of Bear.

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