The final statement about sound banking is spot on. Not something that will matter in the short run. Sound banking is a long term strategy and something to aspire to. It has little to nothing to do with the solution to the present crisis.

I lived through the RTC period. I watched a number of people or companies make a lot of money by being able and motivated to dive in rather than run for the sidelines. It was messy.

The government sold off assets as tiny valuations that later proved way to low even if completely right at the time. To the brave goes the spoils. It is a bit of a long game where the buyers of the assets need to be well capitalized so they can reach the point when the market becomes more normal. Maybe not the way it was but something approaching 'normal'.

If we want better banking regulation then we really need to remember when it comes time to vote. We will need to support people who are willing to make tough decisions but decisions that show a clear understanding of what needs to be done rather than just panders to the latest voter fad. The sting in the tail is when they get it right few will notice or give credit.

Decisive action is needed but it will still be painful. There is no free pass to the solution.

Why the assumption that the total will be north of $! trillion? What did the RTC 'cost' and what is being included in the calculations?

I am not saying that the RTC was cheap or that this time will end up costing less. I have noticed some estimates get the default rate about right but assume no recovery possible on the assets securing the debt. Maybe the calculations are improving or maybe they have the same error. Hence the question...