The New York Times asks one very pertinent question this morning: How many billions in taxpayers’ money will it take to shield Wall Street from ruin?

So far, the feds have stumped up $430 billion in taxpayers’ money to ‘rescue’ Wall Street firms from their own bad investment decisions.

Meanwhile, the Fed’s slashing of rates to try to inject liquidity into the banking system has seen the dollar plunge to record lows against other major currencies.

The biggest danger is damage to the Federal Reserve’s credibility if it is seen as unwilling to let financial institutions face the consequences of their decisions. Central banks have long been acutely sensitive to “moral hazard,” the danger that rescuing investors from their mistakes will simply encourage others to be more reckless in the future.

Fed officials for years have cringed at the mention of a “Greenspan put,” an allusion to the belief of some investors that Alan Greenspan, the former Fed chairman, would use the Fed’s powers to protect them against a plunge in financial markets and provide them with a metaphorical “put” — an option to unwind their positions at an acceptable price.

“Sporting its usual crystal-meth grimace, the Fed is stumping up $200 billion in Treasury bills for desperate New York brokers to kick-start the world’s capital markets, ” says Adrian Ash. “And now they can use flakey mortgage-backed bonds as collateral.”

Adrian has dug up a 2002 World Bank report studying 30 years of systemic banking crises across 94 countries that refutes the notion that central bank bailouts do nothing but “significantly increase the costs of banking crises”.