There was a time not that long ago when few paid close attention to the Federal Deposit Insurance Corporation or those who run it, other than knowing that the agency insures deposits in commercial banks. But the financial crisis has changed all that.
Bair has become known as an outspoken figure who has battled behind-the-scenes in two administrations. She is known to have clashed with the Bush administration (and particularly then-Treasury Secretary Hank Paulson) over her worries that the government and big banks were not doing enough to mitigate the foreclosure problems. More recently, she has reportedly clashed with Paulson’s successor, Tim Geithner, over her concerns about how bailout money is being used.
Economics correspondent Paul Solman sat down with Bair on Friday to discuss her views — and to find out just how much trouble the commercial banking system is in. As the chief regulator of commercial banks, Bair has overseen the closing of more than 100 banks in 2009.
She spoke about the need to break up so-called “too big to fail” banks should these firms get into trouble in the future. And she says she does not agree with the way Paulson and Geithner decided to use the federal bailout money to directly prop up some financial institutions with capital infusions. “In retrospect, I think it was not a good idea,” she said. Solman’s interview airs on Friday night’s NewsHour. In the meantime, here are several exceprts from the interview: