Columbia International Affairs Online: Policy Briefs

CIAO DATE: 07/2008

Fallout from a Bailout

Vincent R. Reinhart

May 2008

American Enterprise Institute for Public Policy Research

Abstract

Resident scholar Vincent R. Reinhart outlines how the Federal Reserve bailout of Bear Stearns tarnished the Fed's reputation, changed its relationship to nonbank lenders, and increased the likelihood of government intervention and regulation. He expects these changes to have long-term adverse consequences.