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FDIC's Bair doesn't like banks' attitudes

Excerpts from her 2011 ABA GR summit speech

Sheila Bair has been a tough regulator and not one to mince words.

The speech covered in the main article was no exception. If anything—she noted that with her June retirement approaching it might be her last speech to an ABA group—she was extremely direct.

Some samples:

• Bank earnings: “There is great pressure to restore earnings to pre-crisis levels. As we saw in the years leading up to the crisis, there is always the temptation to try to squeeze out a few more basis points in earnings now by watering down certain regulatory provisions that are designed to preserve the long-term stability of our financial system and the deposit insurance fund.”

• Regulation:
“We need to get past rhetoric that implies that, when it comes to financial services, the best regulation is always less regulation.”

• Dodd-Frank: “I would very much like to hear from the industry a constructive regulatory agenda that would use the provisions of Dodd-Frank to fix the problems that led to the crisis and help to protect consumers and preserve financial stability in the years ahead.”

• Industry image: “The banking industry seems to have an even bigger image problem in the wake of the financial crisis. … As this historical era unfolds, public opinion as to the role played by the banking industry seems unlikely to be neutral.” Bair said banks could choose to be seen as supportive of recovery or “as a group that mainly looked out for its own short-term interests.”

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