Former FDIC Chairman Speaks Out Against Financial Reform
Former Federal Deposit Insurance Corporation (FDIC) chairman William Isaac spoke out against the current financial reform bill. Isaac says the troubles stem from the 2008 Troubled Asset Relief Program, more commonly known as TARP – the $700 billion bank bailout that followed the financial collapse.
Isaac has suggested that the subprime crisis and collapse of the economy could have been remedied by curtailing abuse of the short sale system in the stock market, or by revising mark-to-market accounting regulations that “needlessly destroyed $500 billion of capital in the financial system,” as well as allowing “the FDIC and the Fed (Federal Reserve Bank) to use their extraordinary powers to contain the crisis.”
The current financial bill, which includes new mark-to-market accounting rules, has become a political issue. Isaac said, “the Treasury itself decided about two weeks after TARP became law that it was a bad idea and never used it for its intended purpose — purchasing toxic assets from the banks.” This has become a source of contention for politicians who supported passage of TARP.
William Isaac currently serves as chairman of Global Financial Services for LECG, a global economic consulting firm.