If you agree that the government must step in because AIG is too big to fail, then you must agree that no corporation must ever get "too big to fail" because it risks everything.
That's key here. The government must put an immediate stop to mega-corporations that are anywhere in the money chain.
Let's see you get that legislation passed.
I wonder if it would be practical to establish diversification rules for backing assets and the assets that back those. It seems that one of the problems here is that fractional reserve banking requires that asset failures be statistically independent. If a bank has 10% reserves and a thousand different assets each of which has a statistically-independent 1% risk of failure, the likelihood that 10% of those assets will fail is quite small. On the other hand, if half the bank's assets are dependent upon some other single point of failure, and that point of failure has a 0.1% chance of collapse, then there's a 0.1% chance that the bank will go severely underwater.