Are you a former WaMu shareholder who think FDIC chief Sheila Bair gifted your company to JPMorgan (JPM)?
If so, you’re probably happy about the new overhaul, and the fact that the power to unwind large firms did not go to the FDIC.
As the NYPost puts it Sheila’s Bair-ly There (rimshot!):
Federal Deposit Insurance Corp. Chair Sheila Bair may be the biggest loser if sweeping regulatory changes proposed by President Barack Obama become a reality.
Hard-charging Bair has been petitioning over the past several months for the FDIC to grab more authority over money-centre institutions like Citigroup, including the power to unwind them, which it does not have power over. However, under the new regulatory framework unveiled yesterday, such powers would reside with the Federal Reserve.
It didn’t help her case that she became enemies with the folks closest to Obama’s office, like Tim Geithner and Ben Bernanke.
That being said, some are (rightly) wondering what the Fed did to deserve more power.
NYT: Senator Christopher Dodd of Connecticut, chairman of the Senate Banking Committee, said the central bank’s failure to be a tough-minded regulator over the last decade had left him and other lawmakers without “a lot of confidence in the Fed at this point.” One of the criticisms is the Fed’s failure to stop the sale of subprime mortgages and other dangerous home loans that helped cause the financial crisis.
Mr. Dodd said giving the Fed a new role as overall risk regulator might also compromise its independent status and conflict with its mandate to control inflation and manage the supply of money by setting interest rates. Read the whole thing >