How Systemically Important is Bear Stearns?

Nouriel Roubini thinks the world could absorb the failure of Bear Stearns:

It is true that Bear is a large broker dealer; but its systemic importance is much smaller than that of much larger institutions. The world and financial market can survive if Bear disappears.

Willem Buiter thinks much the same thing:

Bear is not a deposit-taking institution. It plays no role in the retail payment mechanism and is of no significance to the proper functioning of the wholesale payments, clearing and settlement system.

But when I quoted Buiter saying that, Alea immediately popped up in the comments:

Bear Stearns is a HUGE clearer, so huge that they got away with paying peanuts during LTCM rescue. Talking about serious negative externalities, Bear is one of 2 or 3 whose failure would be catastrophic.

Alea is the #1 credit crunch blog right now, so I'm inclined to give him the benefit of the doubt; Buiter is a (former) central banker, but isn't really concentrated on the US, and I'm sure Bear Stearns is much less important in London than it is in New York.

Bear certainly talks up its clearing services, but this is a pretty obscure arm of the investment-banking world which I'm not at all familiar with. Are they really a huge player in clearing the transactions of other market participants? I have a feeling that Alea's right, and they are. Which means that Roubini and Buiter might well be understating the systemic consequences of a Bear Stearns failure.

I have a feeling that it also might provide another reason why JP Morgan might want to buy Bear Stearns. If Bear is a major JPM competitor on the clearing front, then this could be a nice way for JPM to sew up a very large chunk of a lucrative market with extremely high barriers to entry.