YouSaid · the spoken record

Sheila Bair

lines on the record: 85
first: 2026-05-15
most recent: 2026-05-15
sittings or episodes: 1
sources: podcast

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“The fib will into the banks who can then lend to the funds. I mean, that's just the way I think it works now. And I think a lot of the push for ever more deregulation, lower capital rules, is based on the assumption of the Big Bank lobbyist that they're never going to go down. There's another kerfuffle, another problem. The Fed's just going to open up the spigot again. So, you know, why should they have to operate with all this capital when they can lower their capital and get much higher returns in equity? And I do think that's the unspoken rationale because it doesn't make any sense otherwise because we've got a lot of uncertainties in the banking system right now to be lowering capital. Makes no sense unless you're just banking on a bailout if things get dicey.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Bankruptcy rules. Yeah, exactly. Yeah. It was similar to the FDIC process, which is basically a bankruptcy process. And Title II and Dodd-Frank provides for both. The Title II mechanism, which is FDIC run and a bankruptcy process, a Title I process. So the tools are there, but I don't think there's any I hate to say this, but I don't think there's any chance they'd ever use it. I really don't. I think they're going to bail out again. They already do. They'll set up special lending facilities or ratchet interest rates down. Private equity. So actually, I worry more about private equity than private credit because private equity funds are heavily. Exposed to software companies, which we don't know how that's going to shake out, but there's quite a bit of concentration there.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, I think so, it absolutely is. I mean, I worked hard in Dodd-Frank to come up with, you know, to instill more bitter authorities to put these large institutions into a resolution type process where you would impose that accountability. You could fire the top management boards and impose make the shareholders and bondholders unsecured creditors absorb the losses, all the stuff we didn't do during the crisis.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“couple hundred million dollars yeah success to have access to it yeah yeah the retail people are not going to be getting the crim de la cream on this no that's and that's a huge issue they're going to stuff the riskier stuff into the 401 cases”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“I've read enough to make me really worried about it, so I think really sophisticated big institutions, which have traditionally been their investor-based, they want to do it fine. But no, it's not right for retail, and it shouldn't be going into 401ks. And I'm very worried about that.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I am not a matter of fact, I am not. You know what? If you want to, you want to buy a stock in KKYR, go for it. You might check how it's been forming. And actually, I don't know how it's been performing. But I'm just saying, if you really want exposure, there are, you know, publicly traded BDCs now. There are public ways to do it. There are some funds, 40-act funds, that do invest a small percentage in alternatives too. So there are ways now. But yeah, opening it up for directly for retail, especially 401ks, to start loading up on this asset class, I think is really problematic. And I do worry that the plan sponsors of fund sponsors, the 401k sponsors are going to be getting the hard sell about putting this stuff into people's 401ks. And again, I don't think retail, I know I don't. I don't want exposure to it.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Very incestuous. Yeah, and the BIS did a study about a year ago on this, and others have taken a look at these valuations, and they're finding significant evidence of inflated value. So I do think we need to protect at the retail level. There need to be some not expanding access to this. So you're not a fan of...”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“There's liquidity issue, right? The business model doesn't really work unless most of the capital is locked in. And frankly, there's a lot of research questioning whether it really provides better returns. The S&P 500 has been kicking it for several years now. So, you know, so there are a lot of questions, but for sophisticated investors, you know, go forth and do it. And I don't think it's systemic, but I do. And I do worry about these life insurance companies and the annuitance because, again, you've got private equity owned life insurance affiliate, you've got the private credit affiliate, you've got the life insurance affiliate lending into the private credit affiliate. You're using these third party credit raters to make sure, you know, it's all at arm's length.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“It is a fear argument, and I'm not saying private credit is a legitimate asset class. And I don't think it's systemic, primarily because you don't have all this financial engineering sitting on top of it. I do think they've been making some really risky loans. There are a lot of conflicts of interest involved since a lot of the private credit funds are affiliated with the private equity funds. They're lending to the private equity portfolio companies. And this is a particular problem. Actually, I think this is an investor protection issue more than systemic issue. I really do. And for sophisticated investors, I think private credit is absolutely a legitimate asset class. Got to understand it's not regulated. You don't really know what the loans are worth, right? So there's a big problem with getting a proper valuation on the assets. Not a lot of transparency for retail or even high net worth individuals.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“So it really is the same basic flaw in how the risk based capital rules work. I would just say you can't fund a loan directly or indirectly that doesn't meet prudent underwriting standards because what happens is the banks from a societal standpoint, the banks are funding a lot of really risky loans that if they go bad can have broader bad adverse ramifications for the economy, but they don't look at it that way. And in point of fact, there are pending cap rules now that will make it even more favorable for these banks to be lending to these intermediary funds as opposed to lending directly. So that's what's driving this, not because banks have much tougher capital rules than private funds. That is not true. It's just that they can use more leverage to lend to the fund directly than to lend to the business itself.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“And so the argument is well, you're directly exposed to this highly levered business, so you need to have it tougher than if you just lend the fund. The problem is that you're basically allowing banks to lend and fund indirectly highly risky mortgages that they would not do or not be permitted to do, frankly, if they were doing it directly. And that's exactly what was going on with subprime, these horrible, unaffordable mortgages peddled to a lot of people who didn't understand what they were getting. The banks were funding that through their credit lines and their warehouse funding to provide them.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“The problem is these risk based rules, and this is exactly what was going on in subprime too. The risk-based rules through the magic of securitization structures and quote-unquote over collateralization, you can lend to a private fund and the private fund will give you collateral, they'll give you their loans, and they'll say they'll be valued 150% of what your loan is, right? So you're way over collateralized. And if you do it that way, the capital rules will give you a very favorable capital treatment. So you can use a lot of leverage, increasing your return on equity by lending to the fund. If you make the loan directly to the highly levered business who the fund is lending to, you've got a very, very high capital charge.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“By regulated banks Well, it is, but not in the way that I think the bank's soundbites make it sound. So their soundbite is that the capital regulations are too onerous, much tougher than they are for these private funds, which is non-assigned as the private funds are much less levered than banks. Banks are on a non-risk weighted basis. These big banks are operating with 6-8% capital funding, equity funding. So it's not like they have tougher capital requirements.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“And they annoys me with my dear craft friends who pretend though the Republicans are ones that are pro-industry and pro bailout, and then they do something like that. So go figure.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Anyway, well, yeah. So the merger happened regardless, but it cost the FTA was $17, $18 billion, the deposit insurance fund. It was outrageous. I'm still agassed at that even happened.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so, but there was, I think nobody said this, but my suspicion is there is this Biden administration religious adversity to bank mergers and acquisitions. Oh, like, we can't make banks bigger. So instead of quickly trying to market and sell it, they didn't do that. But even if they hadn't, if they just put it into a bridge bank, they had good assets, they probably could have paid 85, 90 cents on the dollar to the United States. Didn't someone else come up?”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“You're connected. You get stable coin issuer. Yeah. The Biden administration was doing everything they could to kill crypto on one hand and then they bail out one of the biggest, the biggest stablecoin issuers two and a half billion or so of uninsured deposits. Really irresponsible on their part to put that much of their reserves and uninsured deposits, but they were bailed out. I couldn't believe it. I wrote a very strong piece in the Financial Times after it happened It was just this year bailout, bailout, bailout, especially if they're rich, powerful people. I don't, I was just appalled. I'm still appalled. It was 200 billion. It was not systemic. It had good assets if they should have tried to find a buyer quickly”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“They were in the financial institutions. Richest people, among the richest people in the country, I wonder if there's, I wonder.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Were a lot of mortgages that never should have been made, but the system could have absorbed those underlying losses. It was the derivatives on top of that that really brought things down suddenly.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“In the finance market, those are dangerous words, too. I don't want to stifle innovation either, but it's just used as an excuse. Oh, you know, like we got to reduce capital to get more lending out there. I would argue there's too much lending out there already. We're seeing all the cockroaches screwing out now. So, yeah, so it was in derivatives that you said Gram La broke down the, you created these too big to fail institutions that all got bailed out, but also derivatives. Their basically decision was that nobody needs to regulate derivatives markets. The theory was, well, the big banks were dealers, the derivatives dealers. They're regulated by the bank regulators, so we don't need market regulation. And that did not turn out so well because the thing about the mortgage crisis was there were hundreds of billions of mortgages going bad, but there were trillions and trillions of financial engineering on top of how those mortgages would perform. And that's really what got us at the end of the day. Yeah.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Cycles over and over. Well, we are. And deregulation was a big part of the crisis. Nobody wants to say that or just lack of regulation. The Fed and Bernanke and Greensman have both said this. The Fed had the authority to write lending standards, mortgage lending standards for the entire industry. Problem is most of these mortgages are being originated by non-banks. The banks were funding it, right? But they were providing the conduit funding to get them in obscurizations. But the Fed had the power to stop that and just flat out refuge. Oh, we don't want to constrain credit. If I hear that once, I think those are Warren Buffett once said the most dangerous words in finance everybody else is doing it. I think we're going to expand access to credit. I swear to God, because it is used as an excuse for so many.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“They're back with their hat and hands. And they begin. We need a few billion. Right. I'm rooting for, but historically, you know City's going to be back.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“And maybe they should have been put in bankruptcy too, but they were the statute provided for conservatorship. Or they still, you know, language. So they got punished pretty well and we were still getting, well, now they're allowed to keep their capital to build their capital base, but the government's made quite a bit of money since then from that. AIG, poor AIG, you know, they were, as my effectively put conservatorship by the Fed and finally emerged from that. But, you know, there was an unevenness too with the way some of those entities were treated versus, for instance, a citigroup, which”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“I couldn't agree more. They were looking, their baseline was what, you know, how these companies operated before they got into trouble. And my baseline was, you know, bankruptcy was the alternative. We did, but it was uneven too. So we put Fannie and Freddie into conservators.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. That's exactly right. Yeah, no, I think that was so, we did a little bit of that, but not enough, because I think there was just a visceral reaction against being too tough. When the old time...”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“We needed to take gender living care with it and all of that. We need to do something. I'm not suggesting we shouldn't have provided some stabilization measures, but we didn't have to. I think we really went overboard, and I do regret that. And I think people are still mad about it. I think a lot of the polarization that we have today stems from the The perception on Main Street that not only did we bail these guys out, but we bailed them out very generously.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“That helped create the creation. Yes, we should have at least provided more financial penalties, even if we weren't going to send people to jail. I think the bailouts could have been less generous. I am still outraged that we let them pay bonuses at the end of 2009. So I think that was, you know, after giving them all his capital. And then once they, you know, got the benefit of all these other programs and stabilized themselves to enable them to pay that capital back so they could pay bonuses at the end of 2009 when the rest of the country was reeling in a recession. No, I think we could have been a lot tougher. But, you know, these things are all compromises. And actually, it was more with Tim Geithner than Hank Paulson. Hank and I could usually come to a common ground, and we did on issues where we started with different viewpoints. But yeah, I mean, I think there is a perception of some that they were kind of the Wall Street was the center of the universe and the heart throb of the economy.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Well, I think there should have been more accountability. I do think there should have been more accountability. Meaning.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“And actually, I wrote another book for teens called Bullies of Wall Street, which was a book about the financial crisis for teenagers. And then I have golly since 2006. I've been as a sideline writing picture books for children. And those are really fun because those are fictionalized stories. I use rhyming verse. They're just fun. You can be creative because they're really about basic concepts, compounding interest, risk, capital formation. Those are things that really you can't explain in a very basic level for kids. Ponzi schemes is one of them. Asset bubbles is one. I wrote one. It's called Daisy Bubble. It's kind of riff on the tulip bubble that occurred in Hollywood hundreds of years ago. And I was concerned that kids were not going to get this. And that's one of my more popular books, especially with the boys. There's a character named Sly Seal that's manipulating the Daisy market. And I make that.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Laying it out, the analysis out for people in an understandable way is something that I've always tried hard to do and have refined over the years. But yeah, bull by the horns was definitely, it was written for a general population, but it talks a lot about securitization and topics that might make some people's eyes glaze over, but for industry professionals, I think it was of interest that my children's books”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“The same is it just making? For each group. It's a bit of a different approach. I think the fact that I didn't really start in finance that I segueed into it working for the stock exchange than later many other senior level jobs, I had to start from scratch when I was learning it, and I had to learn it fast. But I think my own experience helped me really break down and understand how to approach understanding finance. And one of the big issues is the terminology, the jargon that we use in the financial industry. And that can be very confusing and intimidating. And I think sometimes weaponized, frankly, by people who are trying to sell a product or service. But yeah, I mean, I think my early need to really start from scratch and learn it helped me later break down and explain things. And then I think also my philosophy major, the logical thinking, you know, breaking things down to their component parts, understanding the causal connections kind of”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, which obviously started in 1987, those campaigns start a good year before the primaries began. And that's where I started off as a civil rights lawyer and did civil rights issues and other things for him. But we had the 1987 market crash during the time I was working for his presidential campaign, became a big issue. I had to take a crash course in stock markets, and that was when I was first exposed to finance and found that I was really interested in it.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Well, I have been. I've had a, I've done a lot of different things in my career. And young people, I tell them, don't try to pre-program your career. Don't be narrow-minded about opportunities. And a lot of people stay in the same job for 30, 40, 50 years. I respect that. That's fine. That was never for me. I'm always looking for new things. But I guess my first entree to the Big Leagues release adjacent to the Big Leagues was when I worked for Bob Dole as his counsel first on the Senate Judiciary Committee where actually I staffed him on the Voting Rights Act compromise to Title II of the Voting Rights Act, which is pretty much just eviscerated by the Supreme Court, which was very, you know, that was my first big project for him. So that hurts. But anyway, so then I went to the leaders when became a majority leader. I went to the majority leaders office with them and handled a broader range of issues. But that's really, and then I was on his 88 presidential campaign.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“I could do that, but I would have to get a PhD and probably go to school longer than I wanted to do, do that. So I decided to go to law school, which was philosophy is a good major if you're going to go into law school because both disciplines are about logical thinking, analysis, good writing skills. And so actually the philosophy major was a good preparation for law school. Yeah, say.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I'm a native Kansan. I grew up in southeast Kansas, traditional Kansas Republican family. We were all Jayhawks. I went to medical school at KU. Mom went to nursing school. My sister was a physical therapist. I didn't choose a medical profession, but did choose KU. So it's a good school. It was an affordable school. And I really didn't know what I wanted to do. I was interested in philosophy. I took a lot of courses in English and economics too, majored in philosophy, and realized pretty much as soon as I graduated I wasn't going to have a very good job with that degree. Well, you could always teach.”
2026-05-15 · Masters in Business · Stopping Poor Financial Decisions with Former FDIC Chair Sheila Bair · IDENTIFIED FROM THE TRANSCRIPT · source