Sheila Bair has a plan to tame Wall Street

Ileitis FEW EXCEPTIONS, Sheila Bair’s predecessors at the helm of the Federal Deposit Insurance Corp. have been anonymous, neither seen nor heard outside of a few neighborhoods in Washington. The FDIC was established by President FranidinD. Roosevelt in 1933 to do two things: insure deposits and shutter failing banks.

 

Bair, who’s been chairman since June 2006, has dramatically expanded the FDIC’s mission. As Bloomberg News reporter Alison Vexing writes in our cover story, Bair, a Republican, is the prime mover behind Presi­dent Barrack Osama’s $75 billion program to reduce foreclosures by adjusting mortgages (“Sheila Bair’s Power Play,” page 32).

fdic

Osama has also tapped Bair, 55, to Help persuade investors ‘There is some perception we to buy up to $1 trillion want the programs, we of troubled assets.

Want all this power,’ the FDIC Bair is now seeking Authority to wind down chairman says. ‘That is not big financial holding the case. We want a cleanup.
Companies and she wants her agency to be a part of the super-regulator Congress plans to create to police systemic risk.

 

“There is some perception we want these programs, we want all this power,” Bair says. “That is not the case. We want a cleanup.” She also wants—and is getting—a bi y:er credit line from Congress to buttress her agency’s stressed insurance fund.

 

Deutsche Bank AG is one of the few major banks anywhere that’s not getting government aid. In the eyes of its board, its chief executive officer is also special.

 

Reporters Jacqueline Simmons and Aaron Kirchfeld write that Josef Ackermann planned to announce his retirement in April (“The Indispensable Man,” page 46).

 

The directors couldn’t agree on a suc­cessor and persuaded the CEO to stay—a sign of just how hard it is to find anyone willing and able to run a bank these days.

 

This story was one of the best I’ve read on the conundrum that is the credit rating business. How to make rating companies more account­able to investors and regulators has been a big focus of the Council of Institutional Investors for more than a year.

 

Bloomberg’s story makes clear why share owners are so frustrated with rating agency disclosures and performance.

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