The great Wall Street bailout of 2008 keeps growing. For Bear Stearns, $30-billion (U.S.). Perhaps as much as $100-billion for Fannie Mae and Freddie Mac. Tens of billions of dollars in discounted short-term loans to investment banks. And lower interest rates for everyone.
So where will it all end? In a dark hole of moral hazard, unless the United States overhauls and strengthens its financial system, and that's according to one of the key architects of the bailout.
U.S. Federal Reserve Board chairman Ben Bernanke warned last week that the government's safety net for brokers, banks and mortgage lenders won't necessarily be there in the future. The rescue of Bear Stearns earlier this year was the exception, not the rule, he said, offering his fullest explanation yet of its year-long campaign to ease the credit crisis.
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