WASHINGTON (CNNMoney) -- Washington leaders said "never again" to "too big to fail," vowing that the next time, they'd put a troubled big bank out of its misery.
But are they really ready for a big bank failure? Nobody knows.
This week's big stock dive in Bank of America -- which has balance sheets still loaded with the remains of the housing crisis -- has gotten Wall Street veterans thinking about what would happen if a big bank needed help from the government.
Shares of Bank of America (BAC, Fortune 500) , Citigroup (C, Fortune 500), Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) dropped more than 7% on Wednesday. They dropped by even more Monday, although there was a partial rebound the following day.
Bank of America got a bit of relief on Wednesday, with mortgage backer Fannie Mae agreeing to buy $500 million worth of servicing rights of some of the bank's bad mortgages. But Bank of America remains high on the watch list.
"I think the FDIC is ready, they've been getting ready for this for a while. The question is: Are Tim Geithner and Obama ready?" asked Christopher Whalen, a banking analyst with Institutional Risk Analytics. "Do we want this situation to muddle along? Or do we pre-empt and restructure?"
Banking analyst Richard Bove of Rochdale Securities told Fortune on Monday that such takeover rumors are "all baloney," since banks, including Bank of America, have far more liquidity and excess capital than they did in 2008.
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Others acknowledge that a worst-case-scenario run on the banks could force regulators' hands on a failure, since traditional bailouts aren't a political option. Experts on the frontline of the 2008 financial crisis say they don't believe regulators are truly prepared.