{"id":726,"date":"2023-10-13T17:23:35","date_gmt":"2023-10-13T17:23:35","guid":{"rendered":"https:\/\/connectwithfund.com\/markets\/banks-fail-its-ok-says-former-fdic-chair-sheila-bair\/"},"modified":"2023-10-13T17:23:36","modified_gmt":"2023-10-13T17:23:36","slug":"banks-fail-its-ok-says-former-fdic-chair-sheila-bair","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=726","title":{"rendered":"\u2018Banks fail. It\u2019s OK,\u2019 says former FDIC chair Sheila Bair."},"content":{"rendered":"
\n

Higher interest rates may be painful in the short term, but banks, savers and the financial ecosystem will be better off in the long run, said Sheila Bair, former chair of the Federal Deposit Insurance Corp. <\/p>\n

\u201cWhen money is free, you squander it,\u201d Bair said in an interview with MarketWatch. \u201cIt\u2019s like anything. If it doesn\u2019t cost you anything, you\u2019re going to value it less. And we\u2019ve had free money for quite some time now.\u201d<\/p>\n

\n

Bair, who led the FDIC from 2006 to 2011, caused a stir recently in criticizing \u201cmoonshots,\u201d the crypto industry and \u201cuseless innovations\u201d like Bored Ape NFTs, which proliferated because of speculation and near-zero interest rates. <\/p>\n

Her main message has been that the path to higher rates, while potentially \u201ctricky,\u201d ultimately will lead to a more stable financial system, where \u201ctruly promising innovations will attract capital\u201d and where savers can actually save. <\/p>\n

<\/p>\n

<\/p>\n

\n Former FDIC Chair Sheila Bair was dubbed \u201cthe little guy\u2019s protector in chief\u201d by Time Magazine in the wake of the subprime mortgage crisis.
\n <\/figcaption><\/figure>\n<\/p><\/div>\n

Bair sat down for an interview with Barron\u2019s Live, MarketWatch edition, to talk about the ripple effects of higher rates, what could trigger another financial crisis and why more regional banks sitting on unrealized losses could fail in the wake of Silicon Valley Bank\u2019s collapse in March. <\/p>\n

\u201cWe probably will have more bank failures,\u201d Bair said. \u201cBut you know what? Banks fail. It\u2019s OK. The system goes on. It\u2019s important for people to understand that households stay below the insured deposit caps.\u201d<\/p>\n

The FDIC insures bank deposits up to $250,000 per account. It also has overseen 565 bank failures since 2001.<\/p>\n

\u201cI know borrowing costs are going up, but your rewards for saving it are going up too,\u201d she said. \u201cI think that\u2019s a very good thing.\u201d <\/p>\n

However, Bair isn\u2019t focused only on money traps and pitfalls for grown-ups. She also has two new picture books coming out that aim to explain big financial themes to young readers, including where easy-money ways, speculation and inflation come from. <\/p>\n

\u201cOne thing that I\u2019ve learned from the kids is to not ask them what a loan is, because when I did that, a little hand when up, and she said: \u2018That\u2019s when you\u2019re by yourself,’\u201d Bair said.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Higher interest rates may be painful in the short term, but banks, savers and the financial ecosystem will be better off in the long run, said Sheila Bair, former chair of the Federal Deposit Insurance Corp. \u201cWhen money is free, you squander it,\u201d Bair said in an interview with MarketWatch. \u201cIt\u2019s like anything. If it doesn\u2019t cost you anything, you\u2019re going to value it less. And we\u2019ve had free money for quite some time now.\u201d Bair, who led the FDIC from 2006 to 2011, caused a stir recently in criticizing \u201cmoonshots,\u201d the crypto industry and \u201cuseless innovations\u201d like Bored Ape<\/p>\n","protected":false},"author":1,"featured_media":727,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"class_list":["post-726","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets"],"yoast_head":"\n\u2018Banks fail. 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