Let old banks die, use the money to start new banks

Paul Romer suggests using the TARP money to just start new banks rather than throwing good money after bad in bailing out banks that are full of toxic assets.

Tom Philpott, over at Gristmill promises to discuss other banking models. He links to Martin Wolf at the Financial Times who writes, "a sizeable proportion of [U.S.] financial institutions are insolvent: their assets are, under plausible assumptions, worth less than their liabilities."