Banks have stabilized since the collapse of Lehman, but “failures will continue at a good clip” this year and next, FDIC Chairman Sheila Bair told CNBC’s Maria Bartiromo Tuesday.
“We still have some challenges to work through in the banking sector, but we have time and we can do that in a methodical way,” she said. Bair said the FDIC has over $42 billion in total reserves, with $32 billion designated to cover projected losses over next 12 months.
When asked on the ‘too-big-to-fail’ issue, Bair said “If investors and creditors think the government is always going to step in and take the downsides so they only have the upside, that fosters additional risk taking…e absolutely must have an exit strategy…”
