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.
____
Today’s show is brought to you by VanEck. Go to https://vaneck.com/ForwardGuidance
to access VanEck's Income Investing Yield Monitor.
____
Follow @vaneck_us on Twitter, this episode's sponsor https://twitter.com/vaneck_us
Follow Sheila Bair on Twitter https://twitter.com/SheilaBair2013
Follow Jack Farley on Twitter https://twitter.com/JackFarley96
Follow Forward Guidance on Twitter https://twitter.com/ForwardGuidance
Follow Blockworks on Twitter https://twitter.com/Blockworks_
____
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
____
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.