Last Thursday, the Chair of the FDIC, Sheila Bair, testified before the Committee on Banking, Housing and Urban Affairs on "Establishing a Framework for Systemic Risk Regulation." The status of the FDIC in this economic recession and the role it will play in the recovery are key elements to understand when managing a property or portfolio and looking ahead to how the mortgage finance business will be operated. In this speach, Ms. Bair makes the case for significantly expanded authority of a new "Financial Services Oversight Council" and that no entity should be "too large to fail." In contrast with the Administration's penchant for buying time and procrastinating on the true resolution of "toxic" legacy assets, she concludes with"Perhaps the greatest benefit of hte FDIC's process is the quick reallocation of resources. It is a process that can be painful to shareholders, creditors and bank employees, but history has shown that early recognition of losses with closure and sale of non-viable institutions is the fastest path back to economic health." Hear, hear

For full text of the statement of Chair Sheila Bair, go to: http://fdic.gov/news/speeches/chairman/spjuly2309.html