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Former FDIC chair Sheila Bair on global banking system

Sheila Bair joins Washington Post Live on Tuesday, March 21. (Video: The Washington Post)

The collapse of Silicon Valley Bank and the crisis at Credit Suisse have rattled global markets and sparked fears of financial contagion. Join The Post’s economic columnist Heather Long in conversation with Sheila Bair, former chair of the Federal Deposit Insurance Corporation during the 2008 financial crisis, about the health of the global banking system and how policymakers are responding to the recent turmoil.

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“The vast majority of banks are quite safe and stable … We do have some individual institutions that have not managed their risks well and they are now suffering the consequences. But overall, the banking system is very safe … Main Street houses don’t have to worry about this at all.” - Sheila Bair (Video: Washington Post Live)
“I think that would also be an overreaction. I think we need to market discipline to complement the supervisory process. Examiners can’t do it all on their own … I fear unlimited insurance would really be very expensive to do. It would be assessed on the banking system backstopped by taxpayers and would primarily help very, very wealthy people.” - Sheila Bair (Video: Washington Post Live)
“It was certainly a bailout of uninsured depositors … I call a bailout any special breaks that you give to certain stakeholders in the banking system that are not provided for everybody else. You're breaking the rules. The rules are supposed to be $250,000. You're breaking the rules to help the uninsured." - Sheila Bair (Video: Washington Post Live)
“I think they should hit pause … When they started raising [nominal] rates they were at .08 percent. They’re now north of 4.5 percent. That’s over 6,000 percent increase. That’s a huge increase … It’s a lot for the system to absorb, it’s a lot for the economy to absorb. I’m also worried about labor markets. If they want a soft landing, they will not get it if we have another financial crisis.” - Sheila Bair (Video: Washington Post Live)

Sheila Bair

Former Chair, Federal Deposit Insurance Corporation