This is the Iv-B response to the crisis, to let banks collapse rather than the V-Bi one of propping them up as zombies.
This is a V-Bi aspect of partial insurance, however there can be enough hidden chaos in the system to still bring it down. The problem is still not letting the I-O police and market do their job, they should compensate people who are deserving of insurance and not people who were dishonest in the crisis. The problem should not be moral hazard because this always occurs with insurance, but whether people acted in ways because of insurance that would justify canceling their insurance. For example banks that speculated in a risky way knowing they could become insolvent might not be insured.