Federal Deposit Insurance Corp. Chairman Sheila Bair predicted that reform of the financial services system would likely not be completed this year, but said that was not necessarily a bad thing.

"We really need to focus right now on what caused this crisis," she said during a speech late Tuesday at the 7th Annual 25 Most Powerful Women in Banking dinner hosted by American Banker and U.S. Banker. Congress needs "to take a deep breath and think about it a little more."

While Bair has supported an administration plan to create a new consumer protection agency, she has said it should not have enforcement powers over banks. Instead, she has said it should focus primarily on the nonbanks that made the vast majority of subprime loans that caused the crisis.

Bair also has opposed an idea championed by Senate Banking Committee Chairman Chris Dodd to consolidate banking regulation into a single regulator, arguing that it would not prevent the next crisis.

Among the FDIC's priorities for reform is resolution authority for systemically important institutions, Bair said. She repeated a call at the dinner to assess systemically important firms, including nonbanks, to build up a fund that would cover the costs of a large firm's failure.

She said waiting to assess firms after a failure would force healthier, less-risky firms to pay for the companies that made the biggest mistakes. Bair said large firms should no longer escape the responsibility of paying for an eventual failure, as they did before the crisis hit.

"All these nonbanks, what do they is become bank holding companies, they get the Fed facilities, they get the fee guarantees," she said, describing the rescue efforts the government undertook to save faltering financial companies during the height of the credit crisis.

"My fund took a lot of exposure on these programs and [the firms] never really paid anything," Bair said.

"Going forward, if you're going to be a systemic financial entity and you need for the government to step in and resolve things when you get yourself in trouble, if you're a nonbank you should have to pay something."

Bair first raised the idea of a separate resolution fund for systemically important firms this spring but it is unclear if it will catch on with Congress. While some lawmakers have endorsed the concept, critics have said it would be difficult to raise sufficient funds to cover the failure of a systemic institution, among other problems with the plan.

Bair also predicted that failures would "keep going at a pretty good clip through 2010."

She said banks are still working through "loans they shouldn't have made" and have also begun grappling with loans going bad as a result of the recession. She said that regulators still want banks to lend, but that they expect banks to "make prudent loans."

As the keynote speaker at the dinner honoring women in banking, Bair also reflected on her experiences as a woman making decisions under tight deadlines with her male counterparts in government. She told the audience to "stick to your guns" when you believe your position is right.

"Always keep your cool. Never be emotional," she said.

"My gosh — that's the first thing they want to tag you with, being an emotional woman. So just stick to your facts, use logic and persuasion."

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