Former regulator Sheila Bair on the financial crisis

Jeremy Hobson Sep 25, 2012
HTML EMBED:
COPY

Former regulator Sheila Bair on the financial crisis

Jeremy Hobson Sep 25, 2012
HTML EMBED:
COPY

It may be too early to assign blame for Europe’s economic crisis, but it is not too early to figure out what went wrong in this country back in 2008. Sheila Bair headed the FDIC back then, and is out with a new book this morning, in which she says she saw signs of trouble in subprime mortgages way back in 2006.

The book is called “Bull By The Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself.”

Looking back on her handling of mortgage standards, Bair says, “I did everything I had within my power to do. We worked and pushed very hard to tighten lending standards for both non-traditional mortgages as well as subprime mortgages.”

Her time at the helm of the FDIC was also one of many battles, including ongoing disputes with Timothy Geithner, who was then the head of the New York Fed. Bair cites their fundamentally different viewpoints about the world as the basis for the tension. “He, I think, viewed the large financial institutions as entities that needed to be supported, because he viewed them as central to the functioning economy,” she says. “And I realized their importance to the economy, but I wanted them to have accountability.”

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.