Banking 101

The basics of banking and why politicians bailout banks that fail.

The basic business of banks is managing risk. You loan $100 to 100 people, and they agree to pay you back $102 each. If 99 people pay and one defaults, which is what you expected, you get back $10,098 so you made $98 in profit. Unfortunately, due to the high price of oil, only 90 paid you back, so you only got $9180.
Banks are connected. You didn't have $10,000 to loan out in the previous example, so you borrowed it from me. We both expected you to pay me back $10,050 and have $48 in real profits. Instead, you're now $820 short.
There is little to no "real" money around. It's all borrowed from somebody else. The $10,000 you borrowed wasn't mine either. I owe it to somebody else.
Until the mess is sorted out by the market we won't know which banks need to go bankrupt, which are so close to bankruptcy they can't afford to loan out any new money, and which can afford to make loans - so no new loans, no capital for businesses that need investments or consumers that feel like spending it. That's a depression.
Politicians don't like a depression to happen on their watch. They'd rather redefine what cotracts mean, what money is, etc. It's been done before, multiple times, and in the short term it solves the problem. In the long term, it becomes somebody else's problem.