And if they're being managed by mini-me Greenspan clones, it shouldn't be taken for granted that they want to avoid a melt-down.

I think you're right about the bank failures, however. If a few banks vomit and die it will steady the rest, because they'll be left feeling that a few sacrificial victims are enough atonement - and they can get back to raping and pillaging with a clear conscience.

Which is why I think I think the fraud angle is the most interesting response, politically. It would enforce accountability, of sorts, and shock the banks and financial houses into the realisation that they're not above the law.