Ending Too Big to Fail

As Chairman of the FDIC during the financial crisis, Sheila Bair oversaw the successful resolution of over 350 banking institutions representing assets in excess of $800 billion.  Working in tandem with the Federal Reserve Board and US Treasury Department, the FDIC was deeply involved in the frenetic efforts to stabilize troubled financial behemoths such as Wachovia, Citibank and Bank of America, representing trillions of dollars in assets.

Chairman Bair fought a public --if not always successful -- battle against government bailouts and decried the lack of adequate tools to deal with failing financial conglomerates.  She successfully sought new authority in the Dodd-Frank financial reform law to place all large financial institutions under the same type of receivership process the FDIC has successfully used for insured banks, thus shifting the financial burden of failure onto creditors and shareholders, not taxpayers.

Topics Chairman Bair will address include:

• The doctrine of “too big to fail” and how it distorts resource allocation and leads to excessive risk taking;
• How Dodd-Frank seeks to end “too big to fail” by giving the FDIC the authority to resolve large, failing institutions using its bankruptcy-like resolution process;
• How resolution authority works and the strategies and tools that the FDIC can use to break up and sell off large, financial firms;
• How new requirements for large financial entities to devise their own “living will” or break-up plans will facilitate their orderly resolution;
• The role of higher capital and liquidity standards in reducing the risk of large bank failures and the impact of those rules in promoting financial stability and credit availability;
• Tax code reforms that could further promote more stable financial institutions.

Navigating the Regulatory Landscape in the Wake of the Financial Crisis

Sheila Bair was an integral player in the development and enactment of the Dodd-Frank financial reform law, and as a member of the Basel Committee on Banking Supervision, has also been a pivotal force in the development of tougher global capital and liquidity standards for large, internationally active institutions.   As such, she is intimately familiar with new and pending financial reforms designed to address the root causes of the financial crisis.

Topics Chairman Bair will cover include:

• An overview of the Dodd-Frank law and summary of its key provisions;
• An overview of the regulatory implementation process by the individual agencies and the Financial Stability Oversight Council on which she served;
• The process and criteria for determining whether a financial institution is “systemic” and the consequences of such a designation;
• The “Volcker Rule’s” new restrictions on proprietary trading as well as new regulations and curbs on derivatives trading;
• The new Consumer Financial Protection Bureau and what it means for consumers as well as the financial industry;
• Compensation restrictions;
• New capital and liquidity standards being promulgated by the Basel Committee;
• Resolution regimes being put in place in the US and throughout the world for dealing with failing large financial institutions without resort to government bailouts.

The Future of Financial Services

As Chairman of the FDIC, Sheila Bair was responsible for the safekeeping of some $6 trillion in insured bank deposits at the height of the Great Recession.  Given her integral involvement in safeguarding the financial system during one of the world’s worst financial crises, Chairman Bair has unique insights on how that crisis and ensuing reforms promise to change the financial landscape.

Topics Chairman Bair will address include:

• The current health of the financial services sector;
• The impact regulatory reforms will have on the size and structure of the financial sector;
• Continuing risks in the housing sector and the dangers the foreclosure crisis poses to financial institutions and the broader economy;
• The need for GSE reform and an ultimate “exit” strategy for current government involvement;
• Interest rate risk and the relationship between fiscal discipline and the broader stability of the financial system and availability of credit;
• The potential impact of new consumer regulation on the costs and availability of consumer credit;
• The future of community banking and what can be done to help the nation’s thousands of smaller lending institutions.

Crisis Decision Making

Widely lauded for her “steady hand” in leading the FDIC through the worst financial crisis since the great depression, Sheila Bair has a proven track record of effective leadership and decision-making under extraordinary pressure-- when the consequences are nothing short of calamitous if the decision is wrong.  In naming her to their 100 Most Influential People in 2009, Time Magazine recognized that Bair's “unusual clout…derives from the breadth of her command and her guts in staking new ground”.

Topics Chairman Bair will address in her remarks:

• Assessing risk with imperfect information;
• Evaluating options when there is no choice but to act;
• Resolving conflicts with other decision makers under crisis conditions;
• Dealing with the media and Congress;
• Women navigating male power structures;
• Keeping faith with the public interest and standing up for the little guy.