On the one hand, this split separates the toxic assets, whose value is very uncertain, in an institution that has no insured or guaranteed liabilities and poses no systemic risk.

WSJ: Banks Need Fewer Carrots and More Sticks

Last week, the ombudsman ruled that the insurer failed to inform people who became Equitable customers after 1998 about the full extent of liabilities on guaranteed annuity rate policies.

BBC: Quitting stock market 'saved' Equitable

It will have all the insured deposits and the FDIC-guaranteed short-term debt as liabilities.

WSJ: Banks Need Fewer Carrots and More Sticks

Instead, it guaranteed all the bank's liabilities, including offshore deposits.

ECONOMIST: An incompetent government and a tricky choice for the IMF

Guarantees encourage banks to operate with higher levels of leverage because markets believe that their liabilities--not just customer deposits but also their uninsured public debt--are guaranteed.

FORBES: Get Briefed: Thomas Cooley