We should have let the banks fall

The current banking crisis seems to me being caused by the fact the banks just don't know which bank they can trust and which they can't. This seems to be caused by the fact that they all know they all have toxic debt, but nobody know who carries what toxins and in what quantity.

However, if instead of being bailed out they had simply been allowed to go into liquidation, they would then been cleaned up and the clean bits re-floated - if this had been done it might have caused more pain in the short term, but seems to me we'd be in a better situation than as are now.

But then I know nothing about the complexities of international banking - and ignorance is bliss. Of course, half the problem seems to be nobody else seemed to have a grasp on the complexities either.