While Wall Street and Main Street wait for Obama and Geithner to wave their magic wands next week to make the banking crisis end overnight, there is one question I have to ask:

Aren't there already rules in place for failing banks?  There is a legal framework in which the FDIC determines when a bank's capital ratio is insufficient and swoops in, closes the bank, and acts as the receiver or liquidating agent.

Or perhaps the questions should be:
 
Are there "secret" rules for banks that are too big to fail? 

Just who is the federal government trying to protect by keeping the big banks open?

Let's face it, Citigroup and Bank of America, under current FDIC guidelines, would have been liquidated weeks ago if they were much smaller in size. If the FDIC closed these two banks, just who would lose? The shareholders would be wiped out and the bond holders would suffer greatly. Other banks would swoop in like vultures and buy the pieces. And of course, the FDIC would be forced to take all the toxic crap and eventually sell it at a discount.

However, if some kind of crazy quilt good bank/bad bank framework is set up with all sorts of government guarantees of the bad assets the shareholders, bondholders and derivative holders would probably be rewarded.

Regardless of what Obama and company decide to do the question must be asked next week:
 
Why don't we play by the existing FDIC rules and close these bad banks and get the pain over with?

Sheila Bair of the FDIC must be asking herself the same question.