On March 16 JPMorgan had agreed to pay $2 per share in stock for Bear, which was widely considered a fire-sale price for the 85-year-old Wall Street investment bank. Bear collapsed as large sub-prime mortgage losses and falling confidence in the company prompted a run on the bank.
The original Bear takeover agreement was forged with the support of federal regulators, and the U.S. Federal Reserve is balking at the higher price, "The New York Times" said, citing people involved in the talks.
The newspaper said the Fed originally directed JPMorgan to pay no more than $2 per share to assure that it would not appear that Bear shareholders were being rescued.
Representatives of Bear and the Fed were not immediately available for comment. JPMorgan declined to comment.