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Former FDIC Chairman Sheila Bair on the steps the government took to end the financial crisis and its impact on the current economy.
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Our next -- was one of the first -- -- -- -- the sub prime crisis.
Key player.
Helping to repair the damage after the 2008 financial crash and in this new book.
She a -- -- targets among others Treasury Secretary Timothy Geithner is the -- -- and chief.
The book is bull by the -- written by and the former chairman of the Federal Deposit Insurance Corp.
Sheila -- on time magazine's list of 100 most -- -- people.
I described as a little guys -- and chief Forbes by the -- -- to the second most powerful woman in the world.
Angela Merkel -- -- for the top position.
Great to have you with -- and congratulations on the -- terrific -- -- -- and it is fascinating your perspective in the midst of all.
To be clear arts and on this broadcast numerous times -- I I thought part of the problem is we didn't have more people serving in Washington.
Like you and I just -- compliment you again for the service that -- you -- for the country.
-- you you obviously.
Felt that -- being manipulated and overrun at various points -- in the current administration.
In particularly.
You were distrustful -- but it -- -- Treasury Secretary Timothy Geithner.
Tell us -- Well I think Tim and I just had a fundamentally different philosophical approach to these issues I think -- viewed.
System stability.
From the standpoint of putting a lot of money in large financial institutions -- them healthy and profitable again they can that would take care of the rest of the economy.
I wanted to impose some accountability of one of their shareholders and the creditors to take losses I wanna do more to replace boards.
And managers I want of their -- -- them to feel some of the pain I think there was just this constant.
Clash of views but I must say I think the more of an economic growth that we have now is partly attributable to the fact that we didn't.
Do anything to restructure failing institutions.
To downsize the sector.
We've pretty much -- everybody up it's a bloated sector and it is not serving -- current economy very well also.
I do think that says what the decisions are made -- our have a real life impact of what's going -- with the economy now.
It is very easy for someone and in my position to criticize.
-- retrospect what was happening at the time.
-- those bailouts so I will will be honest and direct about this contemporaneously.
With those bailouts I was saying.
Why is there -- no penalty for the necessity of bail out are there -- safeguards going forward.
Why aren't there being some walls built within these massive institutions.
They were not.
-- and in and that to me is it because these are bright and capable people.
Matters.
The differences in policy and direction.
How in the world could -- come to be.
Well I don't know I think a lot of things happened in 2007 and 2008 that never should have happened we just lost our -- I mean how all these unaffordable mortgages that were made.
Issued strip this market has built up with -- -- reporting and transparency.
Whatsoever.
Leverage show you know -- regulators actually -- capital standards which allow these big institutions to take on more leverage.
It was really it defied logic looking back the things we allowed to go on -- going into 2008.
And in your right we didn't have the tools we needed is he's -- of these big institutions and wasn't -- some of the more healthy and managed well -- the crisis and other when I had to make in the book.
But the sick ones the ones are really having trouble.
We really didn't have a playbook to deal with them.
And I know this controversy in different views about Dodd-Frank but I do think Dodd-Frank now gives regulators the tools.
To impose that accountability and -- that discipline to restructure enforce losses on shareholders and creditors.
If they get in trouble -- you know whether the regulators have the -- -- -- it is another question -- the tools are there are now.
And you say neither President Obama and our governor Romney is drawing.
Chairman of the correct inferences from our experience.
Nor -- expressing.
Policy view as a result of that experience that's in the situation which we find ourselves today.
I think that's right -- wish both of them I'm disappointed in both sides I mean you -- this election is all about the economy.
But economic problems were caused by the crisis the decisions they were made.
In the cleanup after the crisis and I think there were some mistakes that were made and that's okay everybody makes mistakes -- we still need -- a clear path going forward.
-- -- he's -- we need to stable financial sector to have a healthy economy and we just don't have that right now.
Well Lou Lerman who was here with us on the broadcast before you -- down -- -- this discussion -- your new book bull by the orange.
-- -- and said Sheila Bair is exactly.
The kind of person we need on Wall Street and in the exchanges.
You picked the job Lou Lerman support -- for a Sheila bear -- we thank you so much for being -- thank you.
