Spanish Beef Stew

This is sometimes called Ropa Vieja or "Old Clothes," because of its appearance.

1 (1 3/4) pound beef flank steak, cut into thirds
1 medium onion, coarsely chopped
1 medium carrot, coarsely chopped
1 bay leaf
2 teaspoons salt, divided
5 cups water
4 teaspoons olive oil
1 large onion, sliced
1 red bell pepper, cut into 1/2-inch strips
1 yellow bell pepper, cut into 1/2-inch strips
1 green bell pepper, cut into 1/2-inch strips
3 garlic cloves, crushed
3 serrano or jalape