In a statement issued on Friday, he said: “Bear Stearns has been the subject of a multitude of market rumors regarding our liquidity. We have tried to confront and dispel these rumors and parse fact from fiction. Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated. We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations.”

While Bear may have some degree of short-term cash on hand, it is by no means sufficient if all its creditors demand to be paid at once. It has some valuable businesses like its hedge fund servicing and back office unit, as well as aspects of its real estate operations, but in light of the current market conditions it is unlikely to command a high price, especially from JPMorgan, which has said repeatedly that it is not in the market for an investment bank.

In a conference call on Friday, Mr. Schwartz, who just succeeded James E. Cayne as chief executive late last year, struck a frustrated tone as he described the run on Bear’s bank over the last 24 hours, raising the possibility that the firm’s days as an independent bank are numbered. He reiterated that Bear Stearns had started the week with sufficient capital. But four days’ worth of speculation had so rattled customers and lenders that by late Thursday they sought to cash out.

“As we got through the day, we recognized that at the pace things were going, there could be continued liquidity demands that would outstrip our resources,” he said.

Standard & Poor’s confirmed that situation after it cut its long-term credit rating on the company to BBB from A and said more downgrades were likely.

“Bear has been experiencing significant stress in the past week because of concerns regarding its liquidity position,” S.& P. said in a statement. “Although the firm’s liquidity, at the beginning of the week, held steady with excess cash of $18 billion, ongoing pressure and anxiety in the markets resulted in significant cash outflows toward the week’s end, leaving Bear with a significantly deteriorated liquidity position at end of business on Thursday.”

Mr. Schwartz confirmed on the conference call that the firm is working with the investment bank Lazard to consider strategic alternatives, a stock financial phrase that often signifies a potential sale. Though Lazard, Bear Stearns approached JPMorgan about securing a credit facility.

“This is a bridge to a more permanent solution and it will allow us to look at strategic alternative that can run the gamut,” he said. “Investors will be able to see the facts instead of the fiction. We will look for any alternative that serves our customers as well as maximizes shareholder value.”