Sheila Bair

  • 05 Aug 2009 at 5:56 PM

Limitless Limits From SheBair

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bair.pngHow do you limit executive compensation without politically difficult limits? Don’t use limits, of course. Thanks SheBair! We were worried there for a minute!

Banking agencies should become more active in setting compensation standards that are “principles-based” without setting specific amounts for pay, Bair said today in an interview with Bloomberg Television in Washington.

How big is too big? Where does value added end? She knows it when she sees it (so to speak).
Bair Says Regulators Should Set Banker Pay Standards [Bloomberg]

  • 22 May 2009 at 11:19 AM

The Capitalist Conflict

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sbfdic.jpgThat the United States would be more than fleetingly conflicted about the role of capitalism in saving capitalism might be surprising- in any other age. Today, we can only shake our heads watching the government publicly disembowel the “money men” before, nearly in the same breath, pleading with them to jump in and fulfill their traditional purpose: salvaging sinking institutions.

With bank failures at a 15-year high, private equity firms have been clamoring to buy the ailing institutions recently, but have run up against regulatory restrictions and public criticism.
But the F.D.I.C., which is expected to face further bank failures in the coming months, indicated that it might soon release policy guidelines for potential private equity investors seeking to buy failed banks.
“Due to the interest of private-equity firms in the purchase of depository institutions in receivership, the FDIC has been evaluating the appropriate terms for such investments,” the agency said Thursday. It added it would be giving guidance on eligibility and other conditions for private-equity investors in the near future.

Hypocrisy aside, we understand the urge to regulate… well… everything. But why look a cash-cow in the mouth? After the failure of BankUnited it is hard for us to imagine any roadblocks that make sense to erect. All we need now is for KKR to insist this “isn’t the business we are in,” right before closing deals on five failed banks.
F.D.I.C. to Issue Guidelines for P.E. Firms on Bank Deals [Dealbook]

  • 01 Oct 2008 at 10:24 AM

Who Is Running The Show?

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rockbrock.jpgWe are all for simple explanations to complex financial problems. Given this, what prerequisite for a major regulatory position in finance could be more gratifying than the ability to explain complex monetary policy issues to children? And given this, who could be more qualified than Sheila C. Bair, Chairman of the Federal Depository Insurance Corporation, and, more importantly, author of Five Star Amazon Review award winner “Rock, Brock and the Savings Shock?” (For ages: 8-12. Hurry! Supplies are limited and Amazon only has 2 left in stock!)
Try as I might, I couldn’t possibly do the work more justice than this Amazon review:

Rock is a spender and Brock is a saver. Their grandfather hires them to do chores and then encourages them to save by matching the total amount of money that they have accumulated from their pay each week. Brock manages to amass $512 in 10 weeks, while Rock spends his money as soon as he earns it, purchasing a fanciful array of toys, gum, and yard-sale items, all of which are comically depicted in the bright cartoon illustrations. Ultimately, Brock uses his proceeds to buy a fancy telescope and some gifts for family members, generously putting his remaining $50 dollars into a joint savings account that he shares with his brother. Evidently Rock learned his lesson as the tale ends with the twins in their old age as millionaires. A section entitled Do the Math contains charts showing the cash accumulation and what would have happened if Brock had spent some money during the 10 weeks. An explanation of compound interest and advice about saving are included. While the rhyming text has some awkward passages, this picture book is a good way to examine the issue of saving vs. spending.

We would be remiss if we failed to mention that this masterpiece ranks #6 in the Amazon “Twins” category behind #2: “How to teach filthy rich girls” (I own three copies) and #3 “The Ironwood Tree.”
I am looking forward to the chapter on dealing with an abrupt 2150% increase in claim liabilities by depository insurance companies.