As regular readers know, I focus on regulatory things, and to me, the big news in the Bear Stearns story is the Fed's rather unilateral expansion of its regulatory ambit to cover investment banks and other large Wall Street institutions.  There's an SEC turf angle to this story, and there's even a Schmidtian take.  But we've been thinking historically, and it's worth noting that the Fed has always been tied to Wall Street, not Main Street.  It's gotten involved in Main Street, splitting regulation over local banks with the states and Treasury.  But the institution was started to support big banks.  The Fed's influence over Wall Street changed with the Great Depression and the creation of the SEC.  And it looks, from this vantage point at least, like one implication of the Bear Stearns bailout and the move to make credit available to other financial institutions is that the Fed is reasserting by regulation its long unstated role as the chief overseer of the financial markets.

Not to be too anodyne and regulatory turf oriented.  The bailout isn't without costs, of course.  Lisa told you about the impact on employees, look at these pieces taking similar views.

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