&gt;The US did the exact same thing with Lehmann - they found the bank that was more fucked than the rest, let them fail in a controlled manner, and it sent a signal to the market that &quot;this is serious, equity will be wiped out, but it&#x27;s not financial Armageddon&quot;. I expect China to send the same signals.<p>Which is a very good reason the Chinese probably shouldn&#x27;t follow our lead. Letting Lehman fail was a huge disaster. It essentially seized the capital markets and sped up the collapse of a bunch of other banks.  In my opinion, the solution is making the bailout so impalpable to the shareholders than it&#x27;s really the last solution before bankruptcy. Or maybe even some special bank only bankruptcy that allow it to fully operate with government backing.