Bull by the Horns | Sheila Bair

Summary of: Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself
By: Sheila Bair


In ‘Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself’, Sheila Bair takes readers through her journey as head of the Federal Deposit Insurance Corporation (FDIC). A fierce advocate for tighter regulations and higher standards in the banking industry, Bair shares her first-hand experience grappling with powerful entities such as big banks and political regulators. The summary highlights her efforts to implement better financial policies, enforce lending standards, manage government insurance programs, and shift the focus from Wall Street to Main Street.

Sheila Bair’s Journey

Sheila Bair, a lifelong Republican, became the head of the Federal Deposit Insurance Corporation (FDIC) in 2006. Bair’s thorough policy background, including administrative posts in the Senate and the Treasury Department, made her a strong candidate for this key Bush administration job. Bair found that deregulation had demoralized its employees and reduced its staff. With a focus on management, Bair’s leadership transformed the FDIC. She fought for higher capital adequacy ratios than stipulated in the Basel II regulations and got FDIC-insured banks to contribute premiums for their coverage. Despite opposition, Bair prevailed, and in 2011, employees voted the FDIC the “best place to work in the government.”

The Collusion of Regulators and Banks

Bair’s advocacy of tighter regulation placed her in opposition to Washington authorities with extensive ties to large financial institutions-connections that kept regulators in Wall Street’s grasp. This collusion resulted in regulators proposing or opposing rules based on whether they helped or hurt supervised institutions. Bair and her team tried to save homeowners from the increasing default rate of sketchily securitized loans via loan modifications. However, competing incentives meant bankers had little to gain from helping borrowers stay in their homes. Bair cautioned that we risk another financial crisis unless the public counters the undue influence of the financial services lobby.

Saving the Banks, Saving the System, But Not the People

The book section reveals how Sheila Bair, the former chair of the FDIC, made difficult decisions during the financial crisis of 2008, which she aimed to avert from repeating. Bair enacted the FDIC’s duty to ensure depositors’ safety against bank failures and used unconventional methods, such as involving Suze Orman in their campaign, to reassure a panicked public. The narrative also reveals the tension between the government agencies’ different agendas, where Bair saw FDIC’s strong capital position and had the responsibility to protect depositors’ interest when making decisions. Amid the struggle to save banks from failing, Bair lamented the lack of solutions aimed at helping struggling homeowners. Finally, the summary unveils the disarray within the government’s bailout program and the big banks’ subsequent executive bonuses, revealing why Bair would rather have not assisted the banks at all.

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