Bair's 13-Place Dip
If Federal Deposit Insurance Corp. Chairman Sheila Bair wants to keep her high spot on the Forbes magazine's most-powerful women list, she may need to take up songwriting.
Speaking last week at the National Community Reinvestment Coalition, Bair and her introducer, NCRC Chief Executive John Taylor, cited Bair's oft-mentioned position as the magazine's second-most powerful woman in 2008 and 2009 (behind German Chancellor Angela Merkel).
But Bair acknowledged she was demoted in 2010, "probably because fewer banks are failing."
She fell to No. 15, behind even Lady Gaga, the reigning pop princess. Tongue in cheek, Bair admitted it was a tough blow.
"I was quite devastated," Bair said.
Meds and Regs
New regulations don't usually come with a warning label, but perhaps John Walsh, the acting comptroller of the currency, thinks they should.
At an FDIC board meeting last week, Walsh likened rules related to the Dodd-Frank Act to the multiple medications prescribed to a patient. Walsh said it's important to be aware of how different regulatory prescriptions could work against one another. New margin requirements for swaps dealers, for instance, should be balanced with other regulatory frameworks affecting liquidity, he said.
"I have a couple times used the image of adverse drug interactions as a way to think about some of the rules that we're doing under Dodd-Frank, because I think we have to carefully consider the combined effects of what these different motivators are in the process. And striking the right balance between reduced risk and reduced liquidity is not an academic exercise," he said.
Later in the meeting board members discussed, jokingly, the aptness of the metaphor.
"I'm not sure I like the analogy of regulations as a drug," Bair said. "I will have to say sometimes it's appropriate to give out tough medicine." There were "too many sugar pills in the past," she said.
Walsh clarified that he meant legal substances, not narcotics.
"The drug interactions that we're normally worried about are between heart medicine and … a muscle relaxer ... not between crack and heroin," he said.
Mutual Interests
A group of mutual banks has formed America's Mutual Banks.
The AMB said its goal is to let legislators, regulators and stakeholders know about the uniqueness of mutuals.
Under Dodd-Frank, mutuals will be getting new regulators from the Office of the Comptroller of the Currency and the Federal Reserve. They have been regulated by the Office of Thrift Supervision, which is being eliminated.
The AMB said it is concerned about how the changes will affect mutuals. "The founding members of America's Mutual Banks feel that mutuals are in danger of being marginalized in the regulatory transition mandated by the Dodd-Frank Act," Alton McRee, the CEO of Fidelity Homestead Savings Bank in New Orleans, said in a press release from the new group. "Mutual financial institutions need a strong united voice to promote the mutual agenda among federal and state legislators, regulators and other policymakers."
Ray Hallock, the CEO of Columbia Bank FSB in Fair Lawn, N.J., said in the press release: "It has become increasingly clear that many legislators, regulators and other policymakers do not fully understand the structure of a mutual organization. This lack of understanding, rather than any purposeful actions, has led to programs and regulations that have not taken into account the unique ownership structure and risk profile of mutuals."
