YouSaid · the spoken record

Bill Isaac

lines on the record: 114
first: 2023-08-22
most recent: 2023-08-22
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Well, it's never boring. The stakes are pretty high, and you've got to pay attention and so you don't make mistakes and so forth. So it's never boring. I'd like it to be a lot more peaceful than like what we faced in Oklahoma City or New York City on those occasions.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“And we took over the bank. But it was not a fun time. It was a lot of work and a lot of worry about whether that was because this was an early bank failure. We had about several thousand bank failures in the 1980s. And this is one of the first major ones in a major city. And we did not get off to a good start because of leaks that got to the newspapers and we learned some lessons from that and improved our methods. But we acted in a hurry and we got it done in a hurry and everything worked out fine. But it was a very difficult transaction. And we don't like those. We like to have things go much more smoothly.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“But another one was we had the first large savings bank that failed in New York City. I think that was around 1980 or 81. And we were getting ready to do a takeover that would have been done quietly and quickly. And the story broke in a newspaper that we were getting to do that. And so depositors in New York City started coming and wanting their money. And so we were not prepared for that. We were not ready for that. But we acted in an emergency manner. And we went in and did the transaction far quicker than more hurriedly than we intended to. And we got it done. And we got the depositors or money, the ones that wanted it.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“And she goes about 80% of the bank. And we left 20% in the hands. So the existing shareholders. And then we operated it that way for maybe six months or so until we could get it stabilized and fixed properly. And we did a transaction that was a permanent transaction. And we had a permanent capital infusion and so forth. Eventually about two years after that we sold that bank to Bank of America. So different transactions call for different techniques. And the main thing you want to do though is maintain calm. And I can tell you that one of the roughest, well, first Pennsylvanian continental was a pretty rough time.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“$20 billion to meet those withdrawals. And then the FDIC worked as quickly as it could to decide how to handle it. We tried to do a merger with another bank, couldn't get one done that made sense in a reasonable period of time. So what we did is we basically nationalized it. FDIC took over ownership of the bank, acquired 80%, I think we put 5 billion or something like that in it and took ownership over.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“And so we had to deal with it quickly. So that happens. And more than occasionally that happens. And you have to act very quickly. You take extraordinary measures. You may change the transaction to do it a certain way versus another way. But the FCIC's mission is to get in, get it done, and get it over with quickly and keep it as calm as possible. That's not always possible. Continental Illinois, which failed in 1984, one of the largest bank fairs ever, had a massive run. It was a $40 billion bank. And within about a week's time, it lost half of its deposits. And the way that was handled was the bank went to the Federal Reserve Bank of Chicago and borrowed.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“Sometimes it gets a little more raucous. And for example, when Penn Square failed, that was a notorious bank failure in 1982 when I was chairman of the FDIC. And it was in Oklahoma City, and it was a bank that had a lot of notoriety. And it was in the news. And it had a lot of problems and issues that were public. And there wasn't.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“Well, in that case, and in most cases, the FDIC has made it and the state commissioner or the controller of the currency, whether it's a national or state bank. So the primary regulator and the FDIC have made a decision that the bank is no longer viable and something has to be done, either to shut it down and pay off depositors or most likely to merge it into another bank over a weekend and then reopen it so that there's a minimum amount of fuss and delay. It's not a wild and crazy event normally. It's done very professionally and quickly and quietly. And the customers find out it happens over a weekend. The customers on a Monday morning find out that there's a new bank in town and everything's fine.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“You want customers to be calm. And so I would say that that transaction went very well and it was handled by a professional staff very professionally. And you needed a senior person there, such as a board member in order that there can be decisions made on the scene, but the staff knows what they're doing and they don't need a lot of direction from the board member who may be on hand.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“Well, there wasn't a run on the bank. This was done quietly and quickly. And it was, which is how the FDIC behaves normally. Sometimes you have a lot of turmoil, but usually you prefer to go in and close a bank usually on a Friday and you keep it closed over the weekend and you open it on a Monday for business. You know, the FJC is very professional. It handles a lot of bank failures these days. It didn't used to. But the FJC handles a lot of bank failures. The staff knows what it's doing and you have the staff on hand usually well before the date of the date of failure as they help to get ready for it. And people do that quietly. You don't want to make a lot of noise.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“And flew to Puerto Rico, where the second largest bank on the island was failing. The other two directors of the FDIC, one was the controller of the currency, who had his own agency to run. The other was the chairman of the FDIC. And he was, I don't know what he was doing at the time, but he couldn't make it to Puerto Rico. asked me to go, which I did, and we flew to Puerto Rico and took over the second largest bank in Puerto Rico. And it failed. We broke it into two pieces. Half we sold to Banco Popular, which was the largest bank on the island. And the other part of it, the other one-third of it we sold to Banco Santander from Spain. So that was my first day at the FGIC. I was a senior person on site.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“Well, actually, it started much sooner than'81 because I went on the board in 78, and the first day that I joined the FDIC, it was a day I won't forget. I had, I was in Louville, Kentucky, I had had a dinner at the bank the night before a farewell dinner. the executive secretary of the FDIC flew out to Lowell from Washington met me at the Galt House Hotel, which was right across the street from the bank. And I went in to the lobby and said hi to him and shook his hand and raised my hand to take the oath of office. He's formed me in as a director of the FDIC right there in the lobby. We went outside and got a cab and drove to the airport.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“Banking lawyer. And I thought someday I would like to serve in government. And so I was in charge of, I was at first Kentucky, the largest bank in Kentucky at the time. And I was in general counsel and in charge of investor relations and government relations. And I thought I'll just put my name up because there was a vacancy and see what happens because I'd like to see how the process works. Because when I'm old enough, I'd like to do this or something like this. And I put my name up and I got it. So I caught the car. Then I had to figure out what to do with it.”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT
“That's a good question that a lot of people ask. Sometimes I ask myself. But I was actually appointed in 1978 to the FDIC board. It was a three-member board bipartisan. And President Carter appointed me in 1978 at the age of 34 to the board as a Republican member. It was two Democrats and a Republican. And then Ronald Reagan defeated Jimmy Carter in the 1988 election and Ronald Reagan named me as chairman because I was a Republican and then chairman was a Democrat. So we just switched seats in offices. You know, I was relatively well known for a young man because I had been writing and doing a lot of interesting work as a”
2023-08-22 · Forward Guidance · Government Debt Crisis Has Hit U.S. Banks | Bill Isaac, Former FDIC Chair · IDENTIFIED FROM THE TRANSCRIPT