Ex-FDIC head Sheila Bair on WaMu, TARP and her regulator-crush on Jamie Dimon
n her new book, Sheila Bair casts the failure of Washington Mutual as one of her success stories as head of the FDIC during the dark days of the financial crisis in 2008, saying the deal to sell WaMu to Jamie Dimon’s JPMorgan Chase was a “competitive process that had required no financial assistance from the government.”
In case you don’t get it from the title of her new book, “Bull by the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself,” Bair wants history to be kind to her for the role she played as the banking system was in a free fall due to toxic loans, greed and poor management.
In an excerpt posted on Fortune’s website, Bair doesn’t hold back on how she felt about Dimon, revealing her regulator-crush on the CEO of JPMorgan Chase. She says Dimon was the bright light among a group of bankers -- including Citigroup’s Vikram Pandit and Goldman’s Lloyd Blankfein -- she met with in 2008 as then-Treasury Secretary Hank Paulson persuaded the bank executives to go along with the government’s $125 billion TARP bailout.
Bair was not sold on the bailout, and today says it still “plagues me,” according to her book.
Here is part of the excerpt:
Other CEOs were smarter. The smartest was Jamie Dimon, the CEO of J.P. Morgan Chase (JPM), who stood at the center of the table, talking with Lloyd Blankfein, the head of Goldman Sachs (GS), and John Mack, the CEO of Morgan Stanley (MS). Dimon was a towering figure in height as well as leadership ability. He had forewarned of deteriorating conditions in the subprime market in 2006 and had taken preemptive measures to protect his bank before the crisis hit. As a consequence, while other institutions were reeling, mighty J.P. Morgan Chase had scooped up weaker institutions at bargain prices. Several months earlier, at the request of the New York Fed, and with its financial assistance, he had purchased Bear Stearns. A few weeks earlier he had purchased Washington Mutual, a failed West Coast mortgage lender, from us in a competitive process that had required no financial assistance from the government.
Bair’s book is due to be out Sept. 25 by publisher Free Press, a division of Simon & Schuster Inc.
www.bizjournals.com/seattle/blog/2012/09/...-on-wamu-tarp.html
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