The problem with banking is ...
In just about any other business, if 10% of your customers walk away - don't buy your widgets, or subscribe to your service or eat at your place, the business may become less profitable or not profitable at all for a while but it would not mean the end of it. In banking, if 10% of your customers (depositors) walk away, you are insolvent and practically out of business.
I have no idea what the "right" level of capitalization is for a business that has the risk profile of banking - maybe it's 35% or maybe it's 45%. I am sure it is not 12%. Not that there is much that can be done about it because the amount of economic pain that would follow a de-leveraging of banking systems of the world to a level of, say, 40% is so huge that it would never happen.
There is an implicit "bargain" then that we all accept which is that occasionally the system will get wobbly and we the taxpayers will have to step in to backstop some part of it. This is simply the price to pay for the systemic excessive leverage and the only question is whether explicitly acknowledging this would help or not.
An analogy would be a car engine that by its design and materials specs could run for thousands of hours at 8,000 rpm without breakdowns but we decide to rev it up to 13,000 to go faster. We know full well that at that speed it will ocasionally break down and we will have to stop to repair it but the overall distance traveled at that higher speed with an occasional breakdown is farther than the distance that could be covered at lower speed with no stopping for occasional repairs.
We implicitly accept that trade off.