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I would suggest a policy of intervention a la FDIC plus a "bad bank" to work out vehicles that may in time recover.  For individuals with IRA and 401k investments in impaired institutions that are to be dissolved, offer a reimbursement with a limit, of say $30K-$50K, that will not be paid until they have reached 65 years of age.  People have been repeatedly told to diversify their investments to protect against institution risk and there should be some consequence for their decisions to do otherwise.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 3rd, 2009 at 12:28:19 PM EST
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