JPMorgan Chase agreed on Sunday to buy Bear Stearns, the stricken US investment bank, for about $236m in shares in a deal that puts an end to Bear’s 85 years of independence and highlights the risks faced by banks during the credit crunch.

JPMorgan’s cut-price takeover of Bear, which has the backing of the Federal Reserve and the Treasury, came as the Fed cut its discount rate for direct loans to banks and created a special lending facility for primary dealers – two emergency moves aimed at stabilising financial markets.