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LOS ANGELES-”We need to go back to basics and back to fundamentals with banking,” said FDIC chairwoman Sheila Bair to attendees at a TOWN HALL Los Angeles event, held at the Regency Club Wednesday morning. “We want a financial system that will support financial growth.”

During her speech, Bair–who was sworn in as the 19th chairman of the FDIC–shed light on the present economy and financial system and discussed some of the FDIC’s current priorities, one of which is “resolution authority,” which is intended to fill a void in the current financial services regulatory structure. The idea of “too big to fail” needs to end, she explained. “We need to make sure this doesn’t happen in the future and are working our way out of it now.”

Bair, who called herself an optimist, said that “we need better, smarter and more effective regulations, which will get us a long way back to where we should be.” She added that “borrowers need to be prudently underwritten and we need to make sure they can repay their loans.”

Banks continue to face serious challenges, she said, noting that tapping a Treasury Department credit line to replenish funds depleted by a surge of bank failures would harm both her agency as well as the banking industry. “We are going to try to avoid a crutch from taxpayers.”

Bair’s speech echoed her speech a few days ago when she addressed thousands of taxpayers, who were in Chicago for the three day “Showdown” against big banks. During her speech there, at the Hyatt Regency Chicago, she said that one of her messages to the American Bankers Association when she addressed them later that morning was to get in there and support the CFPA. “The Administration has proposed a new Consumer Protection Agency to establish consistent consumer protection standards for banks and non-banks and I strongly support this new agency….” she said.<p."The absence of a national standard was a contributing factor to our current economic turmoil–this uneven nature of regulatory protections and this lack of strong standards that apply across the board," she continued. "This new agency would eliminate regulatory gaps between insured institutions and non-banks, consistent with the need for consumer protection standards across the board. And it would address another gap with authority–to examine for the first time non-bank financial providers."

She explained that by regulating the non-bank shadow sector for the first time, the new agency could help future abuses. “I hope to see other measures being taken that will create a more resilient, transparent and better regulated financial system, including an end to the ‘Too Big to Fail’ doctrine. Yes, no more bail outs. No more bail outs.”

Following her TOWN HALL Los Angeles speech Wednesday morning, Bair stayed to answer some questions from the audience pertaining to some specifics regarding size limitations for financial institutions, on new banks, when the FDIC determines to step in when a bank is in trouble, and even some heated questions about IndyMac Bank’s uninsured deposit losses.

TOWN HALL Los Angeles has been a nonprofit, nonpartisan membership organization since 1937.

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