The most interesting question, I thought, was from a woman who asked why Bair acted competently and effectively in the crisis when the rest of the Bush financial leadership did not. Bair didn’t really answer, but a good answer was implicit in what else she said and what was said (by former ISOM dean Tom O’Brien) — she was looking out for the public interest and that of the depositors, rather than that of the institutions she was regulating. O’Brien stressed her actions on behalf of individuals, including small depositors and even foreigners resident in the US, whom she helped to send their money back home more easily. She clearly took a long-term view of the FDIC in her remarks — it made loans to private companies during the worst of the credit crunch, for example, and she was proud that these loans actually made money “for the taxpayers”.
She still identified herself as a Republican, though she was critical of the Bush administration (“because the crisis intervention was done quickly, there wasn’t as much accountability as there should have been” [my paraphrase]) and she was fully supportive of administration policy. I hadn’t realized that the FDIC is not part of the Treasury Department but an independent agency, so that Obama did not have the option of replacing her when he “kept her on” this spring. (I have no idea whether she would have resigned if asked. She was under some consideration for the Treasury job, at least at the rumor level.) The five-member FDIC board can have no more than three members of each party, actually, so having an ally who is a Republican is actually better for Obama as he appoints new members. Anyway, she describes herself as part of the team whatever her legal status.
The web site fdic.gov is worth looking up — there’s a clear emphasis on reassuring ordinary investors about their deposits, particular if their bank has actually failed as about 30 (mostly small) banks have done so far this year. Bair has done a round of talk shows and PSA’s lately to stress the stability of the system.
Overall, I was very impressed — Ms. Bair seems to have been one of the few grownups in charge in the previous administration, and is providing sensible leadership now.