There was plenty of hand-wringing and introspection at the Federal Reserve Bank of Chicago's annual bank structure conference last week.But not from John Allison, the chairman and former chief executive of BB&T Corp.
Allison, who was the longest-serving chief executive of a top 25 bank when he retired last year, placed all the blame for the financial crisis on the government's doorstep. "Government policies are the primary cause of the crisis we're in," he said. "Only government can make a mistake of this magnitude possible."
He argued that the financial turmoil was simply a normal market correction that was exacerbated by Washington. "The reaction took a normal economic crisis and made it worse than it needed to be."
He faulted policymakers' inconsistent responses to the financial crisis, such as allowing Washington Mutual Inc. to fail while propping up Citigroup Inc.
"In my career, we've bailed out Citi three times," he said. "And each time, it just got bigger."
In the end, he embraced a fully libertarian approach to the financial crisis. He said the country should return to the gold standard and cited Ayn Rand's "Atlas Shrugged" as his favorite book.
But it is doubtful that Allison's ideas will take hold in Washington.
Even former Federal Reserve Board Chairman Alan Greenspan, Rand's most famous student, has backed away from her ideas as the financial crisis has deepened.
Bair Market: Awards
Just how many awards can Federal Deposit Insurance Corp. Chairman Sheila Bair win?In the past two weeks alone she was an honoree at the Hubert H. Humphrey Civil Rights Award Dinner and was named woman of the year by the Financial Women's Association.
Next week Bair will be among the John F. Kennedy Profile in Courage Award winners.
If that weren't enough, she recently made Time magazine's "Time 100" roster of influential people, and, of course, she was named by Forbes last year as the world's second-most powerful woman.
And though Bair did not receive an award from the Senate Banking Committee when she testified on regulatory restructuring last week, she was treated like a hero, with lawmakers lining up to endorse her plan to create a regulatory council to oversee systemic risk.
All this has made Bair something of a celebrity.
After being introduced at the civil rights dinner by former Sen. Robert Dole, R-Kan., whom she had worked for, Bair, a former civil rights lawyer, told the audience that she is "a little taken aback by all this newfound fame and notoriety."
She recounted being recognized in public recently by someone who was apparently familiar with the FDIC's costs in cleaning up recent bank failures.
On a recent flight to Phoenix to give a speech, she said, "A young man walking down the aisle … looked at me and said, 'You're Sheila Bair, aren't you?'
"I said, 'Yeah.' He said, 'I guess you're flying in coach; you really must be out of money!' "
Bair, who like most government officials is required to fly coach on domestic flights, corrected him. "I said, 'No, … we have plenty of money.' "
Going to Bat
When regulators unveiled the results of the stress tests last week, they promised no further examinations were in the offing. But that might not be true, according to Fed Chairman Ben Bernanke.After the Fed chief's speech on Thursday, Charles Evans, the Chicago Fed's president and chief executive, noted the dismal playing records of baseball's Chicago Cubs and Washington Nationals.
"Of all the government interventions that have been contemplated," Evans asked, "is there any chance that there could be some help forthcoming for these institutions?"
"I think we'd have to do a deep assessment," Bernanke deadpanned.
Presented by B of A
It is not unusual for banking companies to sponsor surveys or online polls just to keep their name in the public eye.But it's a fair bet Bank of America Corp. didn't know it was sponsoring a CNN online poll last week that asked, "Do You Trust the U.S. Banking System?"
The answer was an overwhelming no: 65% said they did not trust it. A blogger at bankinnovation.net suggested that participants might have been influenced by seeing "Sponsored by Bank of America" at the top of the poll. "Not exactly the branding B of A had in mind, I would think," wrote JJ Hornblass, the blog's author.