Cost to protect depositors = zero, cost to protect shareholders = $3.6 trillion. What happen to moral hazard for shareholders?
The government needs to protect depositors but to incur or arrange some bailout of shareholders when shareholder equity is already at zero. We can not afford a bailout of shareholders who know the risk associated with any stock investment.
It will take an estimated $3.6 Trillion Taxpayers Dollars bail out shareholders of insolvent banks. We need to protect depositors’ not stock speculators, nationalize failed backs just like Reagan did in the 80’s!!