As the Congress labored over its financial rescue bill (page one), the financial regulatory agencies maintained the frantic pace of their own response to the current crisis. If nothing else, the current crisis is disproving the notion that bureaucrats cannot act quickly.

Here is a partial sampling of agency action over the last seven days or so:

Money market mutual funds (1): The Fed extended loans to banking organizations to buy commercial paper from money-market mutual funds (MMMFs). The loans served to increase the liquidity of the MMMFs’ investments and enable the hemorrhaging MMMFs to meet their obligations without having to “break the buck” — establish a share price below $1. In order for the banks to serve as intermediaries between the Fed and the MMMFs, the Fed also eased rules governing banks’ capital and their transactions with affiliates.

Money-market mutual funds (2): In a coordinated move, the Treasury Department created a one-year, $50 billion guaranty program for the U.S. MMMF industry. Treasury promised to insure the holdings of any retail or institutional MMMF that paid a fee to participate. When banks complained of unfair competition with their FDIC-insured money-market deposit accounts, Treasury “clarified” its plan by limiting the guarantee to amounts held by shareholders in MMMFs as of the close of business on September 19, 2008.

New bank holding companies: The Fed approved applications of Goldman Sachs and Morgan Stanley to become bank holding companies — a status the two once-proud Wall Street firms had previously eschewed. To help the wounded giants with their liquidity problems, the Fed liberalized its collateral requirements for the pair. The agency extended similar privileges to Merrill Lynch, which has been newly acquired by Bank of America’s holding company.

Swap lines: The Fed broadened the scope of its reciprocal currency arrangements (swap lines) to include the central banks of Australia and the Nordic countries. The Fed has previously established similar facilities, designed to improve liquidity conditions in global financial markets, with the central banks of Canada, England, Switzerland, Japan, and Europe.

Equity investments in holding companies: The Fed adopted a new policy statement easing the way for equity investments in banks and bank holding companies. The policy statement provides that an equity investor may control up to one-third of an institution’s shares — up to 15 percent of voting shares and 18 percent of nonvoting shares — without “controlling” the institution for Bank Holding Act purposes. Minority investors may also control a single seat on the board of directors.

Short selling (1): The Securities and Exchange Commission (SEC) adopted a temporary emergency rule banning short selling in the stock of 799 financial institutions. The agency said the step was necessary “to protect the integrity and quality of the securities market and strengthen investor confidence.” Regulatory authorities in the United Kingdom took similar action.

Short selling (2): Later, the SEC amended its September 18 emergency order requiring that certain institutional money managers report their new short sales of certain publicly traded securities. The revised order provides that the information disclosed by investment managers will be nonpublic initially, but will be made available to the public via the Commission’s EDGAR website two weeks after it is filed.

Customer protections: Separately, the SEC released a statement trying to reassure investors that securities deposited with broker/dealer firms were safe. The statement outlined the coverage of the commission’s Customer Protection Rule and discussed the protection afforded by the Securities Investor Protection Corporation (SIPC), which protects securities customers up to $500,000 per customer in the event of broker defaults.

Investigation: The SEC announced a “sweeping expansion” of its ongoing investigation into possible market manipulation in the securities of certain financial institutions. The expanded investigation will include obtaining statements under oath from hedge fund managers, broker-dealers, and institutional investors with significant trading activity in financial issuers or positions in credit default swaps.