The CNBC Town Hall with FDIC Chairman Sheila Bair continues right here on CNBC.com, with Jim Cramer as your host. Watch the accompanying video for questions and answers you didn’t see on T.V.

In the online discussion, Bair answers questions about her relationship with Treasury Secretary Tim Geithner, rebuffing reports that there was friction between the two over the appropriate government response to the economic crisis. Bair also calls it a “prudent move” and “in the long-term interest of shareholders” for banks to cut their common stock dividends and instead build up capital cushions.

Responding to a question about inconsistency in how the FDIC and the federal government have dealt with the recent spate of bank failures, Bair explains the order of priority for who takes losses first in the event of a failure. The first priority is to protect insured depositors, she says. The FDIC covers deposits up to the insured limit and then sells the bank’s assets to recoup its costs. Additional losses are absorbed by equity shareholders and unsecured debt. But when there’s a systemic risk of termination, the government does not follow that protocol and instead provides assistance on an “open bank basis.”

Watch the video to learn about this policy, as well as more of Bair’s responses to questions about the crisis.

Jim Cramer's charitable trust owns JP Morgan and Wells Fargo

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