Do not press an enemy that is cornered

This from Market Movers:

Dave Wrixon has the simplest explanation yet of the latest iteration of the Treasury's bank bailout plan:

It is just a poison pill for debt that is not repaid on time. Basically, you borrow money at fixed interest rate but with a redemption period. If you fail to redeem the debt on time you get nationalized. Simple really.

To me, that sounds good. But I don't have a Ph.d. like this guy, Felix Salmon:

It's clear why the plan is a bad idea: it gives banks' executives every incentive to take massive risks to avoid nationalization. When the last thing we need, obviously, is a bunch of trillion-dollar Hail Mary passes.

That's a good point. Focusing on the punative angle at this point risks ignoring the fact that desperate people are likely to do stupid things.

So, the question is - what do you do to the banks to keep them from burning down their own houses out of desperation?

Or do you just seize them before they start being stupid?