Banking Law

Bairing Her Claws

Rolfe Winkler gave Sheila Bair some kudos today for her testimony before Congress this week, including for her demonstration of a high level of testosterone in telling potty-mouthed Tiny Tim Geithner that he can utter obscenity-laced tirades until his mouth stops up, but Sheila's gonna tell it like she sees it. On the other hand, he gave her a nuggie for not having the foresight to raise deposit insurance premiums soon enough to handle the present crisis. Rolfe's either smoking some really fine Thai stick or he's reaching far afield for something to show that he's being "objective" in his evaluation of Ms. Bair. Bair wasn't appointed until the seeds of this economic crisis had been well sown, and while she was one of the first bank regulators to publicly sound the klaxon horn of the approaching subprime iceberg, I can't imagine a scenario under which the FDIC Board would have approved raising the rate of assessments on FDIC-insured institutions until all hell broke loose.

Winkler's blogging brother at Reuters Blogs, Felix Salmon, waxes harshly on Chair Bair for "getting explicitly political." Salmon thinks that political commentary is outside Bair's area of responsibility. While Salmon's commenters debate the point of the propriety of the Chairman of the FDIC making political criticisms of the conduct of the administration, I think the issue is moot. That horse left the barn in the early stages of Ms. Bair's tenure and has been roaming free and wide over the D.C. landscape for some time now. Ms. Bair's been holding forth for years on matters far outside her job description, including, most famously, following her fetish for consumer advocacy and publicly fostering her mutual admiration society with powerful Democrats in Congress.

The time is long past to try to reign in Sheila Bair by telling her she's speaking out of school. That dog won't hunt. The only recourse for the Obama administration at this point is to expel her for insubordination and/or "not being a team player." Since she's got friends in high places, and seems to be somebody who doesn't scare easily, I wouldn't bet on that, even given favorable odds. Love her of loath her, she's definitely a playa.

Full post as published by Bank Lawyers Blog on August 04, 2009 (boomark / email).