Today's Question: Are some banks really too big to fail?

When industry monoliths faced collapse because of last year's financial crisis, the U.S. government was there to catch them. The Treasury Department pumped $200 billion of taxpayers' money into the institutions considered "too big to fail" through its Capital Purchase Program. Among the private-sector companies that reaped the benefits are Wells Fargo and JPMorgan Chase, each of which got $25 billion; Citigroup, which has received three government bailouts that total $45 billion; Bank of America, which has received two bailouts of around $45 billion; and Morgan Stanley and Goldman Sachs, which both received $10 billion.

Goldman Sachs switched from an investment bank to a commercial bank-holding company during last fall's turmoil. Not only was Goldman Sachs able to pay the Treasury Department back, but the bank made more than $3 billion in net profits during both the second and third quarters of this year. JPMorgan Chase has also paid the government back and is now turning a profit. Citigroup and Bank of America have not rebounded from last year's hit and still owe the government money.

The Treasury Department did not give smaller banks — deemed to be less vital cogs in the financial system’s mechanics — money as it did the giants. Bank closings last week brought the number of failures to its highest level since 1992. This might represent a shift of fallout from the financial crisis to the institutions, from the titans to those not large enough to catalyze the entire system's collapse.

Amid negative public reaction to the bailouts, some of the recipients' subsequent profits and the continuance of executive perks, the government now seems to be coming down harder on the institutions deemed "too big to fail." President Barack Obama announced last week that the Treasury Department would limit perks and salaries of the 25 highest-earning executives at the firms that haven't paid it back for the bailout. And the chairman of the House Financial Services Committee, Rep. Barney Frank, is introducing legislation in Congress that would make it easier for the government to control large institutions and more costly for the institutions to function, and require them to have a strategy for executing their own bailout before they reach the point where they need one.

Are some banks too big to fail, or should all private-sector financial institutions operate without a parachute?