Our banks play an integral role in our society. Because of this they have to be protected, to a certain extent. We should not bail out banks constantly but we should put measures in place to ensure that there is a way to protect them in case they start to turn over.
History has shown that too much money and power concentrated in one place, usually leads to catastrophe. Keeping money in more local and regional banks keeps more money in the general communities of people, and not sending it all over the world. By this process, communities have long term sustainability. When too much money, by too many people is in one bank, a major loss has disastrous consequences. If a small bank fails, only a few people are affected, and not a majority, thereby keeping the loss manageable.