For all the concerns about the government nationalizing big banks, Bair's FDIC had to do that with IndyMac Bank summer, when regulators couldn't find a buyer to take control. (A deal to sell the bank to private investors will soon close.) Other than to launch an experimental mortgage foreclosure prevention plan, the government did not make any dramatic moves.
"It has been difficult to try to run it and enhance its value to market it back to the private sector, but we have been able to do that."
"There's debate as to whether the very large institutions would be susceptible to that sort of market resolution mechanism. You can see with Fannie [Mae] and Freddie [Mac] we've gotten mixed results...I think they do underscore some of the difficulties of the government trying to run even for a temporary period a large, complex institution."
Failures/Takeovers (Watch video)
As more and more capital is injected into troubled banks, there's a growing chorus for the government to cut its losses and start closing institutions. Is it beginning to become an option for the government?
"I don't think so. Not at this time. It is really a tough judgement call to make, because you really do need to make a decision for an institutions if whether they are healthy enough, viable enough to contribute to the economy. It really doesn't make sense to invest taxpayer money if they are not contributing to the economy....At this point, our strategy is a good one and if other, more dramatic steps need to be taken later we'll see how that plays out.