Sheila Bair

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Sheila Bair
Sheila C. Bair.jpg
Chairperson of the Federal Deposit Insurance Corporation
In office
June 26, 2006 – July 8, 2011
President George W. Bush
Barack Obama
Preceded by Martin Gruenberg (Acting)
Succeeded by Martin Gruenberg
Assistant Secretary of the Treasury for Financial Markets
In office
2001–2002
President George W. Bush
Preceded by Richard Carnell
Succeeded by Wayne Abernathy
Chairperson of the Commodity Futures Trading Commission
Acting
In office
August 21, 1993 – December 21, 1993
President Bill Clinton
Preceded by William Albrecht (Acting)
Succeeded by Barbara Holum (Acting)
Personal details
Born Sheila Colleen Bair
(1954-04-03) April 3, 1954 (age 60)
Wichita, Kansas, U.S.
Political party Republican
Spouse(s) Scott Cooper
Children Preston
Colleen
Alma mater University of Kansas, Lawrence
Religion Lutheranism

Sheila Colleen Bair[1] (born April 3, 1954)[2] served as the 19th Chairperson of the U.S. Federal Deposit Insurance Corporation (FDIC).[3] She was appointed to the post for a five-year term on June 26, 2006 by George W. Bush. Bair served as a member of the FDIC Board of Directors through July 8, 2011.[4]

Early life[edit]

Bair is a native of Independence, Kansas. Her father, Albert, was a surgeon. Her mother, Clara, was a nurse and housewife. She received her bachelor's degree in philosophy from the University of Kansas in 1975,[5] and worked as a bank teller for a brief period, before receiving a J.D. from the University of Kansas School of Law in 1978. In 1981, she was recruited by Senator Bob Dole, a Republican from her state, to serve as counsel on his staff in Washington.

Career[edit]

Prior to her appointment at the FDIC, Bair was the Dean's Professor of Financial Regulatory Policy for the Isenberg School of Management at the University of Massachusetts Amherst, a post she had held since 2002. She also served as Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury (2001 to 2002), Senior Vice President for Government Relations of the New York Stock Exchange (1995 to 2000), a Commissioner and Acting Chair of the Commodity Futures Trading Commission (1991 to 1995), and Research Director, Deputy Counsel and Counsel to Kansas Republican Senate Majority Leader Bob Dole (1981 to 1988). While an academic, Bair also served on the FDIC's Advisory Committee on Banking Policy. Bair also pursued a seat in the U.S. Congress (she lost the 1990 Republican nomination in the 5th Kansas district by 760 votes to Dick Nichols).[6] Bair began her career in the General Counsel's office of the former U.S. Department of Health, Education, and Welfare.[7]

Ms. Bair left the FDIC on July 8, 2011, when her five-year term expired.[8][9] She became a senior advisor to The Pew Charitable Trusts in August 2011.[10] She is chair of the Systemic Risk Council, a volunteer effort formed by the CFA Institute and the Pew Charitable Trusts to monitor and comment on regulation.[11]

2008 financial crisis[edit]

Bair assumed a prominent role in the government’s response to the crisis, including bolstering public confidence and system stability that resulted in no runs on bank deposits. The FDIC did not turn to taxpayer borrowing to manage its losses and liquidity needs, instead funding them through its traditional means of assessing banks for the cost of insuring their deposits. The FDIC’s resolution practice of selling failing banks to healthier institutions, while providing credit support of future losses from failed banks’ troubled loans, saved the FDIC’s Deposit Insurance Fund $40 billion over losses it would have incurred if the FDIC had liquidated those banks.[citation needed]

During the congressional effort to reform the financial regulatory system, Bair successfully pushed to establish tools to end the doctrine of “too big to fail” by extending the FDIC’s resolution process to large, systemically-important financial institutions. The FDIC was also given joint authority to order the restructuring of an entity that cannot demonstrate, through a continually-monitored “living will,” that it can be unwound.[citation needed]

Bair is active on the international front, and pressed the Basel Committee on Banking Supervision to adopt strong capital and leverage standards.[12]

In a fictional TV movie about the crises, Patricia Randell played Bair in the 2011 HBO movie Too Big to Fail, based on the popular book of the same name by New York Times journalist Andrew Ross Sorkin.

Opinion[edit]

In 2009, Bair was named one of Time magazine’s “Time 100” most influential people. In 2008, Bair topped The Wall Street Journal’s annual 50 “Women to Watch List.” In 2008 and 2009, Forbes ranked her as the second most powerful woman in the world behind German chancellor Angela Merkel. Forbes described her FDIC office as "the last stop for capital-starved banks (and their insured customers) before going under."[13]

Criticism[edit]

Bair has received criticism for her outspoken style and what some[who?] saw as her single-minded defense of the FDIC’s deposit insurance fund in the heat of the response to the financial meltdown in 2008. The FDIC was sued by Judicial Watch twice seeking information regarding the FDIC decision jointly with the Federal Reserve and Treasury Department to “bailout” Citi. The litigants say the FDIC was refusing to provide any information on the reasons for its support of the bailouts of certain banks stemming from the Financial Crisis of 2008, and continues to do so. Judge Emmett G. Sullivan of the US District Court (DC) said the case was not moot because the litigants continued to contest whether the FDIC reasonably interpreted the scope of his request. The FDIC says the court specifically gave the FDIC the option to submit additional evidence demonstrating that its original search was complete. The FDIC says it has done so, and the issue of the scope of the search is now before the Court.[14][15]

In addition to the legal proceedings, Bair has made the following remark, which spoke to the FDIC’s lack of statutory authority before the Dodd-Frank Act of 2010. In a response to the Inspector General for the TARP program, Bair remarked, "We were told by the New York Fed that problems would occur in the global markets if Citi were to fail. We didn't have our own information to verify this statement, so I didn't want to dispute that with them." In 2008, the FDIC did not have the legal authority to put large holding companies into its bank receivership process and little authority to access information outside of the insured institutions. Since these were holding companies, and not banks, the FDIC had to rely on information from other regulators. That is no longer the case. In 2010, the Dodd-Frank Act was enacted, expressly prohibiting bank bailouts by extending the FDIC’s resolution authority to close the largest financial firms and make their shareholders and creditors bear the losses without creating a systemic disruption. Dodd-Frank also gave the FDIC new authority to directly access information from large bank holding companies which are not in sound condition.[15][16]

Awards[edit]

Bair has received many awards, including the John F. Kennedy Profile in Courage Award and Hubert H. Humphrey Civil Rights Award.[17]

In 2009, Bair was presented the Consumer Federation of America's Philip Hart Public Service Award.[18]

On March 29, 2012 Bair was honored by the Romney Institute of Public Management (BYU Marriott School of Management) as the Administrator of the Year.[19][20]

Publications[edit]

References[edit]

  1. ^ "Presidential Nomination: Sheila Colleen Bair". The White House website via Archives.gov. 2006-05-01. Retrieved 2009-03-08. 
  2. ^ Howard, Theresa (2008-10-03). "FDIC's Bair emerges as key player in bank rescues". USA Today. 
  3. ^ "FDIC: Board of Directors & Senior Executives". Fdic.gov. Retrieved 2010-10-17. 
  4. ^ "FDIC: Board of Directors & Senior Executives". FDIC. Retrieved 9 July 2011. 
  5. ^ "Bair, Sheila C.". Current Biography Yearbook 2010. Ipswich, MA: H.W. Wilson. 2010. pp. 23–26. ISBN 9780824211134. 
  6. ^ Cope, Debra; James Swann (October 2006). "Full plate, Open mind: Meet FDIC chairman Sheila Bair". Community Banker. Retrieved 02-01-2009.  [dead link]
  7. ^ "FDIC: Tapping the Unbanked Market: Helping People Enter the Financial Mainstream". Fdic.gov. Retrieved 2010-10-17. 
  8. ^ Nocera, Joe (July 9, 2011). "Sheila Bair's Bank Shot". New York Times Magazine. 
  9. ^ "FDIC Chairman Sheila Bair leaving agency". USA Today. 2011-05-09. 
  10. ^ The Pew Charitable Trusts (2011). Former FDIC Chair Sheila C. Bair to Join Pew as Senior Advisor. Retrieved May 12, 2012.
  11. ^ "Former FDIC Chair to Lead Systemic Risk Council". 2012-06-06. 
  12. ^ Basel Committee said to consider 3% surcharse on biggest banks
  13. ^ "Forbes Most Powerful Women #2 Shelia C. Bair". Forbes.com. August 27, 2008. Retrieved 2011-07-18. 
  14. ^ McKinley and Fitton (June 16, 2011). "Sheila Bair's Legacy: Bailouts, Secrecy And Power Grabs". Sheila Bair's Legacy: Bailouts, Secrecy And Power Grabs (Forbes). Retrieved 2011-06-19. 
  15. ^ a b Bigman, Dan. "The Real Legacy of Sheila Bair’s FDIC". Forbes. Retrieved 2011-06-22. 
  16. ^ McKinley and Fitton (June 16, 2011). "Sheila Bair's Legacy: Bailouts, Secrecy And Power Grabs". Sheila Bair's Legacy: Bailouts, Secrecy And Power Grabs (Forbes). Retrieved 2011-06-19. 
  17. ^ "FDIC chair Sheila Bair to give 2010 Dole Lecture - KU News". University of Kansas. Retrieved 2010-10-17. 
  18. ^ "Thirty-Ninth Annual Awards Dinner". Consumer Federation of America. June 17, 2009. Retrieved 2013-01-21.  (hard to view)
  19. ^ "BYU MPA Administrator of the Year". mpa.byu.edu. Retrieved 2012-03-30. 
  20. ^ "Administrator of the Year and Graduation Banquet". mpaa.byu.edu. Retrieved 2012-03-30. 

External links[edit]

Political offices
Preceded by
William Albrecht
Acting
Chairperson of the Commodity Futures Trading Commission
Acting

1993
Succeeded by
Barbara Holum
Acting
Preceded by
Richard Carnell
Assistant Secretary of the Treasury for Financial Markets
2001–2002
Succeeded by
Wayne Abernathy
Preceded by
Martin Gruenberg
Acting
Chairperson of the Federal Deposit Insurance Corporation
2006–2011
Succeeded by
Martin Gruenberg