Professor Edward Kane:

It is all a question of how completely one wants to do things. We have this important supplier of equity capital which is being fleeced. As far as I know, positive law does not call this theft by safety net and we will have to change the laws to do this. Until we change the laws, there will be firms that will be in the shadows, if one likes, or near-banks, if one wants to call them that that, limited banks that are not chartered as banks, that will try to take advantage of various opportunities. However, we do not have to align the incentives of all these people. If these are people who are the equivalent of termites in a house which are eating wood we cannot see, they should be punished by the usual system. No one should be bailing out hedge funds directly. They are not covered by the safety net.