The Federal Deposit Insurance Corporation, or FDIC, which insures bank deposits, has the authority to take over failing banks and has done so.
It also makes it possible for private investors to invest in weak banks and thus solve financial problems as they occur at insured institutions.
Why not permit private sources to resolve banking problems instead of relying on the intervention of the government with takeovers. The latter ploy has not worked well, despite the rationale that only such bailouts are the solution to get us out of financial meltdowns.
Government solutions come with a steep price. Permanent government meddling and horrendous debt.
Not relying on the FDIC more than we did was a terrible administrative mistake. ( See the Earl J Weinreb NewsHole® comments.)
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