Former regulator Sheila Bair on the financial crisis
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.”
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