Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., joined the Squawk Box crew this morning. She shared her insight on the recent credit turmoil, the banking sector and more.
Bair on Credit Turmoil
"I think we're getting over the hump in terms of the credit turmoil and the underpricing of risk. I think we are getting through that. I think the uncertainty that I see is a second wave of more traditional credit stress from the economic slowdown."
Bair on Banks
"I do think overall banks are strong right now. Capital levels are high. They came off of record earnings in dealing with this credit distress, so I think they were well positioned, and some of the turmoil frankly plays to banks' strengths. They did not have to access the capital markets for funding. They have deposit funding and other sources…A lot of the lax lending was done outside the banking sector, and I think we're remembering that there are some value-added in dealing with the regulated institution, so I think those types of issues play to banks' strengths.”
Bair on Regional Banks
"Their capital tends to be higher than larger banks. They do have challenges in the current credit environment, like all institutions, but overall I think they're fairly well positioned."