The government didn't get stuck with the "riskiest" assets as collateral, JPMorgan Chase CEO tells a Senate committee looking into the deal.

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The Bear Stearns assets provided to the Federal Reserve as collateral in the securities firm’s sale weren’t its “riskiest,” JPMorgan Chase Chief Executive Officer Jamie Dimon told the Senate Banking Committee on Thursday.

“The notion that Bear Stearns’ riskiest assets have been placed in the $30 billion Fed facility is simply not true,” Dimon said. “And if there is ever a loss on the assets pledged to the Fed, the first $1 billion of that loss will be borne by JPMorgan alone.”

The central bank agreed to provide $29 billion of financing as part of JPMorgan’s March 16 takeover. Bear Stearns, formerly the fifth-largest U.S. securities firm, was close to bankruptcy last month after a run wiped out its cash reserves. The Fed provided emergency funding and then helped arrange JPMorgan’s purchase.

New York Federal Reserve Bank President Timothy Geithner told the committee that the central bank’s emergency actions to rescue Bear Stearns were aimed at halting a crisis that would have caused “protracted” damage to the economy. Fed Chairman Ben Bernanke told lawmakers that while the aid wasn’t a Fed bailout of Bear Stearns, it was true that the central bank “bailed out the markets in general.”

Still, JPMorgan “could not and would not have assumed the substantial risks of acquiring Bear Stearns” without the Fed’s help, Dimon said.

The Fed is placing the Bear Stearns assets in a portfolio managed by BlackRock Financial Management and expects to eventually recover its investment, Bernanke said.

The assets consist of “performing” residential and commercial mortgages, along with various bonds carrying at least investment grades, according to the New York Fed. Bear Stearns valued the portfolio at $30 billion March 14, the Fed said.

The assets also include asset-backed securities, bonds backed by commercial mortgages and collateralized bond obligations, according to the Fed. The assets were reviewed by the Fed and weren’t individually selected by JPMorgan Chase or Bear Stearns, the New York Fed said.

The assets taken by the Fed are current and domestic securities rated as investment-grade, Dimon said.

“We kept the riskier and more-complex securities in the Bear Stearns portfolio for our own account,” he said. “We did not cherry-pick the assets in the collateral pool.”

Without the Fed-engineered deal, Bear Stearns would have failed, and “the consequences could have been disastrous,” Dimon said. “People all over America — union members, retirees, small-business owners, and our parents and children — are now invested in the financial system through pensions, 401(k)s, mutual funds and the like.”

Bear Stearns CEO Alan Schwartz said the security firm might have survived if the Fed had acted earlier to lend money directly to investment banks.

“Had the discount window been opened to investment banks for their high-quality collateral, I think it is highly, highly unlikely in my personal opinion that we would be in the situation we find ourselves in today,” Schwartz said.

Fed loans to investment banks have averaged about $38.1 billion a day for the past week, according to the central bank.

After striking a deal to buy Bear Stearns for less than 10 percent of its market value March 16, JPMorgan increased its offer a week later amid a revolt by the smaller firm’s shareholders.

Bloomberg News reporters Ian Katz, Yalman Onaran, Jody Shenn and Craig Torres contributed to this story.