Fed to the teeth

Ben Bernanke sounds willing to extend the Federal Reserve’s emergency lending to brokers into 2009. That may be expedient. But it raises moral hazard issues that beg a quid pro quo in the form of tougher regulation. On that front, the Fed chairman is making the right noises. But Congress needs to act to give the Fed sharper teeth. Having ridden to the aid of Bear Stearns in March and started lending to investment banks - which it doesn’t even officially regulate - the US central bank is already...