The counterparty's over

"g it posed a threat to the financial system. This year the direction of counterparty risk has reversed. Some hedge funds worry they could be dragged down if a bank goes under. After all, Bear Stearns was the industry's second-biggest prime broker (see chart), providing hedge funds with a myriad of services including lending and the custody of assets. As Bear approached bankruptcy, these clients rushed to move their accounts to other banks."