The Tea Party Case for Higher Capital Requirements

This Atlantic Wire piece on the Cypriot bail-in and Tea Party was kind of fun. In it, they quote the Tea Party Patriots:

Like in America, the [financial] sector then used government force to escape the effects of their errors. Unlike in America, they didn’t settle for bailouts from taxpayer dollars – they seized customer’s assets to pay for their mistakes.

The Patriots sense that something is amiss with banking throughout the world. Banks are making mistakes, but taxpayers and depositors are having to pay for these mistakes. Instead, "the banks" should have to pay these mistakes. So why isn't that happening?

In short, banks are severely over-leveraged. Most of the money they lend out for mortgages and to purchase assets comes from lenders (including depositors) rather than from equity shareholders. If by "the banks", the Patriots feel like the owners (shareholders) of the bank ought to pay for the costs of their mistakes, they should endorse higher capital requirements.