Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Government Needs to Level With Us About Banking Sector

Apparently, Bank of America (NYSE:BAC) and Citigroup (NYSE:C) are operating under secret protocols with the U.S. government, under which they have to meet certain targets in order to continue to qualify for U.S. government aid. In a free market, the bane of which is the general lack of transparancy, this secrecy is all the more puzzling.

Why doesn't the government just come out and say what almost any reader on this site knows to be the truth: That the largest U.S. banks are basically insolvent, and are only being kept alive through the use of government life support initiatives? Let's not kid ourselves, the large banks would not be going to the goverment for aid if 1) they had been well managed and 2) they hadn't destroyed their own balance sheets, and ability to survive independently with bad bets on bad loans.

Stockholders need to know just how badly these banks are "stuck," how much it is going to take to bail them out, and how long. And also what the conditions for continuing aid, which would give us all a clue as to how the institutions got into this mess to begin with?

And if shareholders, or worse, depositors, choose to desert these banks, that is their right. The government needs to prevent banks from being too "big to fail." Allowing a very real risk of failure, even for the biggest banks, would be a good start.