I'd say the policy should be: reinstate glass-steigal on steroids. If and when banks fail, blow out the management and have unlimited FDIC insurance backstoppe

I'd say the policy should be: reinstate glass-steigal on steroids. If and when banks fail, blow out the management and have unlimited FDIC insurance backstopped by the Fed. No need to apply discipline on the liability side of banking because it hurts main street. If the investment banks fail ( not commercial banks ) let them die. Whatever damage that causes to the macro economy, make up for it by providing stimulus projects/tax cuts as needed. Lets stop privatizing profits and socializing losses. BTW, you are right GS and JPM would have gone under if not for the bail outs. They were experiencing a classic bank run and not enough liquidity to support. A great opportunity to clean up wall street was missed. Instead the country was looted at the expense of main street and they got away with it. That is how it will look 100 years from now.