Former FDIC Chair Bair: Bank Bailout Was ‘Overkill’

Moneynews:

The billions of taxpayer dollars spent to bailout big banks was largely unnecessary, according to Sheila Bair, former Federal Deposit Insurance Corp. chairwoman.

In an excerpt from her new book “Bull by the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself,” which was published by Fortune, Bair writes “with the exception of Citi, the commercial banks’ capital levels seemed to be adequate.”

“Without government aid some of them might have had to forgo bonuses and take losses for several quarters, but still, it seemed to me that they were strong enough to bumble through,” she writes.

That the U.S. government showered Wall Street with cash during the financial crisis as people were losing their homes and jobs continues to be a hot button issue. Many Americans blame the banks for the crisis and argue that Washington could have and should have done more for the people and less for those who created the problem.

Bair seems to agree and this is not a new position for her.

Last October, the San Francisco Chronicle reported that Bair spoke at the National Asian American Coalition conference about her disappointment that so little appears to have been done for the millions of homeowners still in distress.

“I wish I could say things have gotten better, but I don’t see that they have. The loan programs are not doing what they need to. Part of the problem is a not very well-functioning mortgage services industry. The resources are not there. The training is not there. The commitment is not there,” the Chronicle quoted her as saying.

Consistent with that sentiment, Bair writes in the book, “We used up resources and political capital that could have been spent on other programs to help more Main Street Americans.”

She admits that there was a lot less information available when the bailout decision was made and that that uncertainty played a factor in how the situation was handled.

Still, she writes, “In retrospect the mammoth assistance to those big institutions seemed like overkill. I never saw a good analysis to back it up.”

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About Ask Marion

I am a babyboomer and empty nester who savors every moment of my past and believes that it is the responsibility of each of us in my generation and Americans in general to make sure that America is as good or even a better place for future generations as it was for us. So far... we haven't done very well!! Favorite Quotes: "The first 50 years are to build and acquire; the second 50 are to leave your legacy"; "Do something that scares you every day!"; "The journey in between what you once were and who you are becoming is where the dance of life really takes place". At age 62 I find myself fighting inoperable uterine Cancer and thanks to the man upstairs and the prayers from so many people including many of my readers from AskMarion and JustOneMorePet... I'm beating it. After losing our business because of the economy and factors related to the re-election of President Obama in 2012 followed by 16-mos of job hunting, my architect-trained husband is working as a trucker and has only been home approximately 5-days a month since I was diagnosed, which has made everything more difficult and often lonely... plus funds are tight. Our family medical deductible is 12K per year for two of us; thank you ObamaCare. But thanks to donations from so many of you, we are making ends meet as I go through treatment while taking care of my father-in-law who is suffering from late stage Alzheimer's and my mother-in-law who suffers from RA and onset dementia as well as hearing loss, for which there are no caretaker funds, as I continue the fight here online to inform and help restore our amazing country. And finally I need to thank a core group of family, friends, and readers... all at a distance, who check in with me regularly. Plus, I must thank my furkids who have not left my side through this fight. You can see them at JustOneMorePet.
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One Response to Former FDIC Chair Bair: Bank Bailout Was ‘Overkill’

  1. Pingback: Obama’s Hidden Bread Lines | askmarion

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