by Calculated Risk on 6/12/2009 06:27:00 PM

From Forbes: Bair Cautions Banking Crisis Is Not Over (ht jb)

Sheila Bair ... said Friday that while the crisis that swept through the financial world last year has subsided somewhat, it was far from over and there would be "many more bank failures" ahead.

"I think there's still some challenges, I think we need to be realistic. There are still some troubled assets on the books and we still have an economy that's under significant stress," said Bair in a 90-minute interview with Forbes reporters and editors on Friday.

We still don't know how deep the recession is going to be," she said, adding, "we'll still be well below what we were in the S&L days."
...
"Hopefully there are no more events that create liquidity stresses on the banks," Bair said, knocking on a wooden conference room table, "and now we're having more good old-fashioned capital insolvencies."

... she worried aloud about the current trend toward making the Federal Reserve banking's regulator-in-chief. ... "No other developed country gives their central bank the kind of power we give our central bank," Bair said.

"[The Fed] had authority to prescribe across-the-board lending standards for mortgages, and a lot of people said they should do that and they just didn't," Bair says as an example of where too many roles led to lapses. "Where does the consumer role go on your priority list? At some point it just doesn't get done. It just doesn't get the focus it should."