Banks were ‘stupid’ during housing meltdown: Fmr. FDIC Chair

By PoliticsFOXBusiness

Banks were ‘stupid’ during financial crisis: Sheila Bair

Former FDIC Chairman Sheila Bair on CEOs of some of the largest banks facing their first grilling on Capitol Hill since the financial crisis.

Alexandria Ocasio-Cortez, D-N.Y., asked JPMorgan Chase CEO Jamie Dimon, on Wednesday, whether more people should have gone to jail for their role in the 2008 financial crisis that led to a decade-long housing meltdown. Former FDIC Chairman Sheila Bair believes people are still frustrated by the lack of accountability.

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“I think it's just reflective of a broader you know populist sentiment that there wasn't enough accountability,” she told FOX Business’ Maria Bartiromo in regards to AOC’s question. “And I don't think any of the gentlemen there should have gone to jail. I think a lot of this activity was just stupid and high risk and greedy didn't cross the line into illegal activity.”

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In Bair’s opinion the efforts to expand homeownership were praiseworthy objectives, but “very misguided in terms of how it was executed,” because it backfired. However, it doesn’t “excuse the banks for doing stupid things" she stressed.

“A lot of people lost their homes after the crisis and then bank regulation was encouraging this,” she said.

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Bair also said the Congress overreacted after the crisis and was unsuccessful.

“It was expensive administratively,” she said, “but it didn't really fundamentally change the system.”

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