"Although banks perform an essential economic function — bringing together investors and savers — they are not the only institutions that can do this. Pension f

"Although banks perform an essential economic function — bringing together investors and savers — they are not the only institutions that can do this. Pension funds, university endowments, venture capitalists and corporations all bring money to new investment projects without banks playing any essential role." Ummm... Pension funds invest in the stock market and they depend on banks to help themselves out. Same for univ. endowments and venture capitalists. Corporations still use banks to manage their cash flow and guess how they and everybody else flows their cash through? Banks!!! If anything, the importance of banks has been highly understated. PS. This does not imply the necessity of the bailout. The bailout is ultimately unnecessary. Wamu was still solvent from a cash flow perspective when the FDIC took over and even if some large institutions fail (as some already have), there are more than just three or four banks.