FDIC insurance was never questioned in 2008 and therefore customer confidence/common depositors were never threatened. Investors who had purchased toxic assets

FDIC insurance was never questioned in 2008 and therefore customer confidence/common depositors were never threatened. Investors who had purchased toxic assets were threatened. Banks who held toxic assets on their balance sheets were threatened. Bankruptcy would have been extremely painful for everyone, but it would have punished the losers and rewarded a new generation of risk takers. It also would have led to a stronger recovery than what we have now, which is a zombie-like market controlled by central bank monetary policy and disconnected from free floating macro economic conditions.