Jeff Hummel has an excellent review of Ben Bernanke’s new book in the WSJ:
Mr. Bernanke credits targeted bailouts, starting in December 2007, with providing liquidity almost exclusively to solvent institutions with good collateral. Yet as his graphs demonstrate and his words fail to emphasize, for almost a year Fed sales of Treasury securities offset these injections. In doing so, the Fed was most definitely not acting like a traditional lender of last resort, which calms panics by increasing total liquidity, but was instead merely shifting savings into targeted institutions from other sectors of the economy. As many market monetarists have maintained, Mr. Bernanke’s crisis response was far too tight at the outset. Then, when Mr. Bernanke, running out of Treasurys to sell, finally orchestrated an unprecedented increase in the monetary base in October 2008, he partly offset the impact by paying interest on bank reserves, thus discouraging bank lending.