Bair's comments came amid the largest bank failure in history, with JPMorgan Chase buying out Washington Mutual. JPMorgan has been an active participant in picking up failing financial institutions, but Bair said the company is not the only one interested in stepping in to take ownership of the distressed assets.
In this case, the Federal Deposit Insurance Corp chairman said the WaMu failure happened in as orderly a manner as could be reasonable expected. She said the FDIC, and subsequently taxpayers, absorbed no costs.
"We wanted to make sure we handled it in a way that was smooth, that did not impair depositor confidence or public confidence, and obviously at minimal or zero cost for us," Bair said. "And I think we did that successfully. So I'm breathing a lot easier now, and I think those who have been watching our reserves should view this as very, very good news."
Bair also said she supports the bank bailout plan laid out by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke and hopes for a change in mark-to-market rules that have made distressed bank assets difficult to price.
"There needs to be a lot of transparency in the process, how the pricing is done, who's getting the benefit," she said.
In the meantime, Bair said she's relieved that the deal got done for WaMu.
"Depositors are protected and the deposit ... fund is protected, and ultimately taxpayers protected, because we are backed by the full faith and credit of the United States government," she said. "So this is a huge win, I think, for everyone."
