WASHINGTON — On March 28, CUNA's Chief Economist Bill Hampel was interviewed on Bloomberg TV along with Jay Mueller of Wells, Fargo Bank on the ongoing mortgage crisis and credit crunch. They were asked about recent Federal Reserve and Treasury Department actions to bolster the credit markets by organizing a buyout of Bear Stearns by JP Morgan Chase and extending the Fed's discount window to investment banks.

Casting aside fears of the moral hazard of rescuing an investment bank that bet so heavily on mortgage-backed securities, the engineered buyout of Bear Sterns by JP Morgan Chase, first for a mere $270 million, or $2 per share, and later revised upward to $10 per share, was a precedent. Before this, only depository institutions were allowed access to the Fed's discount window. Through March, the Fed has extended some $260 billion in short-term loans to banks.

Acting to prevent the failure of one of Wall Street's most storied firms from cascading to others, the Fed guaranteed JP Morgan's backing of Bear's financial obligations and absorbed $30 billion in mortgage-backed bonds as collateral.