Financial Crisis, Stimulus Package etc

Size of the financial crisis is clearly becoming unmanageable. Unfortunately after allowing failure of Lehman Bros, focus of governments is on preventing any more bank failures and thereby of the system. Obviously the markets have not liked this policy and is clearly reflected in the market price of the banking stocks and the drubbing that indices have received.

Question is what is more important, stopping bank failures or reviving economy? Is there any other option?

I believe that while equity of stockholders is completely wiped off, it is time that write offs by deposit holder is given a serious consideration. What if the depositors are asked to take a 10-20% loss on amounts deposited (and maybe compensated in form of 0-coupon long dated bonds). This will free up precious resources of government and restore the health of the financial system pronto.

If losses are borne by those who are supposed to have lost, the system will normalise far more quickly. 10-20% loss of depositors will prevent full-scale bank failures and at the same time provide the capital to the banks and also confidence to start functioning again.