Former Clinton treasurer Robert Reich believes the US government needs to get drastic to save the banking system. To wit, he prescribes:
“a giant reorganization of the banks, in which their shareholders lose what little value they have left, their creditors get paid 20 cents or so on the dollar, and their assets are written down to about 20 percent of their face value. In effect, it’s an industry-wide reorganization under bankruptcy. This way, bank balance sheets are cleared up, there’s no run on any one bank, everyone starts anew, and taxpayers aren’t left holding the bag.”
Globalmitch 