With a fiat currency like ours, the role of the government is to protect the value of the currency — even if it means artificially propping up non-performing assets that are collateral for loans. The government’s only interest in bailing out the borrower is to keep the lender solvent — thereby propping up the currency.
That’s a bogus argument for fascist crony capitalism.
A bank can fail without destroying the currency.
Glass-Steagall and antitrust could and should have kept our banks smaller and thus less individually systematically important.