Why not nationalization?

That's the chorus in the financial pundit community.  Peter Davis of Capital Gains and Games offers a cogent summary of the reasons why not, channeling the FDIC's Sheila Bair.  In summary:

1. No US institution currently has the legal authority to take over a multinational financial conglomerate.  Banks are relatively simple operations, and the FDIC has extensive experience in resolution of a liquidation.  But banking and insurance and stockbroking and securities underwriting and capital markets trading all piled into one institution are vastly more complicated--there is, after all, a reason why each of these businesses have different regulators.  The argument for breaking banks into commercial and investment banking doesn't seem to have made much sense from an economic standpoint, but it may have made sense from a regulatory standpoint.  At least in the US, no regulator had the expertise to oversee these giant companies.
2. The FDIC does not have the funding to perform these kinds of takeovers.  The FDIC is basically an insurance pool--it is structured to handle a market with enough small players to constitute an actuarial universe.  Since it was set up, however, we have built up institutions big enough, and idiosyncratic enough, to swamp the actuarial pool.
3. Other countries have regulatory oversight of these financial conglomerates too, and they may object to a U.S. takeover.  Our global institutions are woefully inadequate to regulate global capital markets.  I think that capital controls are a terrible idea, for reasons I will outline anon, but if we don't want them we'd better figure out better ways to coordinate global actions like these.  We need the financial equivalent of war--specifically, World War II, when countries terrified of existential threats cooperated more than they really wanted to.  

This tracks what I am hearing elsewhere.  In brief, the banks we want to nationalize are too big and complicated to be nationalized; the banks we could nationalize don't need it.

I'm beginning to have a lot more sympathy for Japanese banking regulators.