During her tenure as Chair of the Federal Deposit Insurance Corporation (FDIC) from 2006 to 2011, Sheila Bair managed over 300 bank failures, including the collapse of Washington Mutual in September 2008, the largest bank failure in American history.
Bair joins Forward Guidance to apply her vast experience to share insight on recent failures of Silicon Valley Bank, Signature Bank, and First Republic. Filmed the afternoon of May 18, 2023.
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Timestamps:
00:00 Introduction
06:37 Right Now, The Main Issue Is Interest Rate Risk
12:56 What Causes A Bank Run?
17:55 Are Bank Runs Faster In An Age of Mobile Banking?
21:55 Van Eck Ad
22:45 Money Market Funds and The Fed's Reverse Repo Facility Is Where A Lot Of Bank Money Is Going
25:33 Risk Of Further Big Bank Consolidation
29:51 Best Time To Shut Down A Bank Is Friday Night
31:10 Federal Reserve Lending To Insolvent Institutions Increases The FDIC's Cost To Resolve Failed Banks
32:53 How To Know When To Shut Down A Failing Bank
34:51 "I Was Surprised At The Biden Administration's Level Of Involvement"
37:12 The Systemic Risk Determination, Explained
42:56 2018 Loosening Of Regulation of Regional Banks
47:35 Forcing Banks To Raise More Equity (i.e. sell stock)
49:31 The Federal Reserve's Role As Bank Regulator
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
