Investment banks are in the pits these days, and they're scurrying for all the help they can get. The consequences of a big bank going under are too grim to even ponder, so the Federal Reserve Bank has several steps to ensure that the financial markets aren't buried beneath whatever house of cards currently shelters them.

Two major actions the Fed has put forth are the orchestration of JPMorgan's (NYSE:JPM) adoption of Bear Stearns, and opening up its discount lending window -- typically reserved for commercial banks -- to give investment banks a cheap source of emergency capital should the need arise. All well and good.

Few should debate those actions, but The New York Times pointed out one peculiar conflict of interest that should catch investors' attention. JPMorgan Chairman and CEO Jamie Dimon, and Lehman (NYSE:LEH) Brothers CEO Richard Fuld, both serve on the Board of Directors at the Federal Reserve Bank of New York -- yep, the same bank that facilitated the Bear Stearns transaction.

I'm merely speculating here, but it doesn't seem too far-fetched to assume that Jamie Dimon's executive spot at the New York Fed may have played a role in what some have called "the deal of the century," when JPMorgan got Bear Stearns for what was initially an almost hysterically low amount. The original $2-per-share offer amounted to less than the value of Bear Stearns' office building. Shareholders soon revolted, and the offer quintupled. Still, the thought of a deal struck by a CEO who's serving both as the purchaser and an executive from the organization conducting the sale seems on par with having  real estate appraisers decide the value of their own homes. Of course it'll work out grossly in their favor.

I'm not insinuating any of these executives have done anything wrong. The Federal Bank of New York is made up almost exclusively by corporate executives, including General Electric (NYSE:GE) CEO Jeff Immelt and Pepsi (NYSE:PEP) boss Indra Nooyi. Giving front-line soldiers the ability to run the war isn't necessarily a terrible idea. They are -- at least, they should be -- the ones who really know what's going on.

Rest assured, though, that when two high-profile bank executives have just one degree of separation from Ben Bernanke, the old motto of "It's not what you know, it's who you know" rings loud and clear.

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. JPMorgan Chase is a Motley Fool Income Investor recommendation. The Fool has a disclosure policy.