This is a very naive position. What about the hundreds of billions of dollars at these banks belonging to depositors? Ooops, there goes GE’s payroll account, so nobody at GE gets paid this week.
a) deposits are insured to a certain amount.
b) there’s a stronger case for the depositors to recover their money than the investors.
We, the American public, have now paid more than the GE payroll in lost yields, subsidies and back-door bailouts through the NY Fed.
The prospect of failure is necessary in capitalism. For banks to understand the real hazards of risk, they have to have failures to remind them that there’s a price.