Sheila Bair Called the Financial Crisis. Here’s Her New Nightmare


Sheila Bair Called the Financial Crisis. Here’s Her New Nightmare

Sheila Bair approached the podium in the downtown Renaissance Washington hotel ballroom to address the American Bankers Association for the final time as one of their most powerful regulators.

Arms crossed, brow slightly creased, Bair took the calm tone of voice of a frustrated teacher who had grown sick of her students’ excuses.

During her five-year tenure chairing the Federal Deposit Insurance Corp., Bair had gone up again and again against bankers and lobbyists who resisted her attempts at imposing regulation. Even now in March 2011, with the economy still reeling from a crisis caused by bad loans, none of them wanted to listen.

“We need to get past rhetoric that … the best regulation is always LESS regulation,” she told the assembled bankers. Banks had put consumers at risk, she said, and now they faced a choice: to be viewed by history “either as a group that supported the restoration of free enterprise and public responsibility in the American economy, or as a group that mainly looked out for its own short-term interests and resisted reforms that could have restored a sense of confidence and fairness in our financial markets.”

Her audience squirmed. Then they heckled.

“If there was one meeting that I’ve had in my life that was uncomfortable, that one would have to be at the top of the list,” said Matt Williams, a Nebraska banker and state senator who then was vice chairman of the ABA. He remembers how Bair endured hostile questions. “She came in there to punch the bankers in the mouth.”

 Rest here…


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