Why should medallion owners be protected for their investment decisions? I thought that was the gripe about the banks to (albeit - the banks are far less deserving of sympathy).
The medallion system was a bargain: we protect you from competition, and you agree to price controls and other regulations. Taxis can't do surge pricing, for example, because the rate regulations don't allow it. So if the government is going to back out of its end of the bargain, it's not unreasonable to compensate medallion owners.
Medallion owners were suckered into "investing" in them when law mandated that taxi drivers NEED to buy them. Ideally, they should just have been asked to go through a taxi training program and asked to interview at taxi commpanies and get a job. Much like airline pilots. They are innocent humans and should be reimbursed (maybe with a haircut).
Banks need to suck it up. I don't care about them. They cal lay off some execs to make up that money if they want to.