Investment bank regulation after the Bear rescue

The subprime mortgage crisis has seriously jarred the financial system in the Unites States in at least three distinct areas: subprime lending, the proper role for the ratings agencies in the securitisation process, and the implications of the Bear Stearns meltdown - and its subsequent rescue - for financial markets and institutions. In this article, we analyse the last of these issues and review and evaluate a number of possible regulatory responses.

Unique rescue

The Federal Reserve's emergenc