Events are moving so fast that perspective is difficult. In the last three weeks, the big investment banks have evaporated: busted, sold off, transformed into Federal Reserve-regulated commercial banks. Fannie Mae, Freddie Mac and American International Group Inc. have been, in a fashion, nationalized. And in the last week, bank consolidation has vastly accelerated, with Washington Mutual Inc. going to J.P. Morgan Chase & Co. and most of Wachovia Corp. swept up by Citigroup Inc. More failures, more rescues are undoubtedly to come, with institutions large and small assailed by funding pressures, runs and ruinous write-downs.

But for all the change -- and as we went to press we were still awaiting the re-vote on the big bailout plan -- you can begin to see an outline of where we'll be when markets stabilize and a vestige of normalcy returns. That's particularly the case in banking, which seems to be reaching the climax of a consolidation trend that began decades ago, with the first acquisitions by expansionist regional banks such as Bank One Corp. (now J.P. Morgan Chase), NCNB Corp. (now Bank of America Corp.) and First Union Corp. (now Wachovia, er, Citi). Many deals later, we are rapidly approaching the point many predicted in the halcyon '90s when the U.S. would end up with a mere handful of true banking giants.

This picture, of course, is complicated by the presence of the two large investment banks-turned-commercial banks, Morgan Stanley and Goldman, Sachs & Co. Both institutions are still vulnerable to market undertows and both may well be forced to seek mergers with banks or swoop in to buy one themselves; but their role in the new world remains unclear.

That's not the case in commercial banking. A few things seem clear already. Citigroup, BofA, J.P. Morgan Chase and possibly Wells Fargo & Co. (particularly if it grabs a large failing bank) will dominate U.S. banking. They will be very large -- so large that they will be, by definition, too-big-to-fail. That reality will shape their regulation in the years ahead, presumably from the Federal Reserve, which, as the crisis has unfolded, has itself seemed to merge with Treasury as an uber, even unitary, regulator. How will the Fed handle these institutions that begin to resemble public utilities -- not because they are natural monopolies but because they will be so central to the health of the American economy? Moral hazard is the long shadow of too-big-to-fail. Given the moral hazard that hangs over these institutions, the Fed will have to supervise them tightly -- perhaps a return to the kind of enveloping regulation that existed after the Great Depression. But this isn't the '50s. The Fed must also ensure that these institutions are free enough to use their capital, reach and expertise to make money for shareholders, to remain vital, innovative and competitive. It's tough to balance innovation and growth with safety and soundness, plus weigh the "needs" of a handful of large banks against those of the rest of a still-fragmented banking system.

This also represents a cultural watershed in American economic history. Americans have long been ambivalent about banking, which was often portrayed as a nexus of established wealth, market speculation and tightfisted miserliness. Indeed, since Alexander Hamilton's First Bank of the United States, the history of central banking in America is a long chronicle of populist distrust, fear and paranoia. Banking represents a form of centralization that has been intermittently anathema to a tradition of localism in the U.S. And yet, over the last few decades, Americans have tolerated a consolidating banking system and even deified a central banker, Alan Greenspan. The issue du jour is how this degree of concentration, both in banking and in financial regulation, will play politically. Will it unleash decentralizing impulses, particularly in a climate of economic downturn and deleveraging? Or will it be accepted as the natural course of events -- bigger means sounder, more competitive? Was the rebellion against the Paulson plan in Congress a harbinger of populist-driven crusades against Wall Street, Washington and globalization, or simply the sputtering of a gang of political deadenders?

These may be big questions, but it's too much to expect regulators or bankers to consider them right now: The world is on fire and they wield a garden hose. Eventually these issues will re-emerge-and then we'll see how comfortable it is to live among giants.