Wednesday, July 8, 2009

Bair prefers banks invest in banks

Can we back up for a moment? Sheila Bair runs the FDIC. The job of the FDIC is to insure bank deposits, and to minimize losses to the government when banks fail. From her perspective, then, the more private capital there is invested in the banking business (and thus in place to absorb potential losses ahead of the government), the better. This isn’t complicated. She should be encouraging PE investment in banking, not throwing up roadblocks to it.