After becoming Wall Street’s hero yesterday, Timothy Geithner is back on his way to whipping boy. The bank rescue plan — whereby the government buys more troubled and toxic assets to move them off bank balance sheets — made Wall Street happy. Today’s announcement that Geithner thinks the government needs more power to seize non-bank institutions? Not so much.

FDIC-style seizures of institutions about to fail

There are plenty of financial institutions (AIG comes to mind) that are not considered banks. Therefore, they do not have the same regulatory structure as banks. And the FDIC can’t swoop in, seize them, and protect depositers when they are on the verge of failure. Timothy Geithner thinks that there should be some sort of an FDIC-like body that could seize non-bank financial institutions on the verge of destruction.

It’s an interesting thought — but not one that gives Wall Street the warm fuzzies. Although I’m starting to think that maybe anything that Wall Street dislikes is something we might at least consider…