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CNBC EXERPTS: FDIC CHAIRMAN SHEILA BAIR ON CNBC'S SQUAWK BOX TODAY

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FDIC Chairman Sheila Bair
AP
FDIC Chairman Sheila Bair

WHEN: TODAY, THURSDAY, JANUARY 13TH AT 8:30AM ET</</p>

WHERE: CNBC'S "SQUAWK BOX"
Following are excerpts from the unofficial transcript of a CNBC interview with FDIC Chairman Sheila Bair on CNBC's "Squawk Box" today.
All references must be sourced to CNBC.

Bair on Dodd-Frank Changes:

I would be surpised if changes to Dodd-Frank, theres going to be oversight, thats good, accountability thats good, it gives the regulators a lot of new tools and the latitude to implement them, and we are doing that in what we think is a prudent and balanced way. But I think oversight and accountability is good, but major changes- i dont think that will happen.

Bair on Peace with Dodd-Frank:

I THINK THE INDUSTRY FOR THE MOST PART HAS MADE PEACE WITH DODD/FRANK AND WE NEED TO IMPLEMENT IT NOW AND GET ON WITH IT. ANY TALK ABOUT MAJOR CHANGES WOULD CREATE UNCERTAINTY THAT MIGHT NOT BE SO POSITIVE.

Bair on Incentive Compensation:

I THINK YOU WILL SEE REQUIRED DEFERRALS FOR EXECUTIVE MANAGEMENT.

Liesman: PAYMENT IN STOCK?

I THINK, YES, THERE WILL BE, A CERTAIN LEVEL, YES, A CERTAIN MINIMUM PERIOD FOR DEFERRAL. I THINK YOU WILL SEE THAT FOR THE EXECUTIVES. I THINK FOR MATERIAL RISK TAKERS WHO BET THE RANCH YOU WILL SEE ADDITIONAL REQUIREMENTS FOR THE BOARD TO IDENTIFY WHO THOSE ARE AND BE MORE INVOLVED IN THEIR COMPENSATION AS WELL. I THINK WE'RE VERY CLOSE.

Bair on Small Banks:

MOST OF THEM HAVE MAINTAINED A HEALTH THROUGHOUT THIS, ACTUALLY THE SMALL BANK LOAN BALANCES THROUGHOUT THE CRISIS HAVE ACTUALLY INCREASED BY ALMOST 4%.WE SEE AN 11% DECREASE WITH LARGER INSTITUTIONS. I THINK THAT'S GOING TO TURN AROUND. QUARTER AFTER QUARTER WE'VE SEEN LARGE BANK BALANCES DECLINING, LOAN BALANCESDECLINING, THAT FLATTENED OUT AT THE END OF THE THIRD QUARTER. WE THINK ITS TURNING AND SOME OF FOURTH QUARTER DATA SUGGESTS IT IS TURNING.

Bair on Banks Getting Better:

IT'S ABSOLUTELY GETTING BETTER.FAILURES PEAKED AT in 2010 at 157.THE NUMBER OF FAILURES THAT ARE ELEVATED WILL BE MUCH LOWER THIS YEAR. PROFITABILITY HAS RETURNED.CREDIT QUALITY IS IMPROVING.THE DELINQUENT LOANS ARE DOWN.THE CHARGE-OFFS ARE DOWN.THAT'S TRUE FOR BANKS LARGE AND SMALL.

Bair on Large Bank Dividends:

IT'S REALLY THE FED'S CALL. THEY WILL BE VERY MEASURED AND PRUDENT. THERE ARE STILL UNCERTAINTIES OUT THERE WITHTHE HOUSING MARKET, WITH SERVICING. WE NEED TO HAVE CLARITY ON WHAT THE RANGE OF LOSSES COULD BE THERE TO MAKE A, YOU KNOW, OVERALL DECISION ON THAT KIND OF AN ISSUE. CLEARLY THE CAPITAL BASE OF THESE LARGE INSTITUTIONS IS SOMETHING THAT'S VERY IMPORTANT TO THE FDIC.SO WE WILL TAKE A CONSERVATIVE VIEW IN OUR CONSULTATIONS.

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