Today Jack interviews William “Bill” Isaac, who served as Chair of the Federal Deposit Insurance Corporation (FDIC) from 1981 to 1985. Isaac recounts his handling of large bank failures in the 1970s and 1980s, including the collapse of Continental Illinois, which was the largest FDIC takeover until Washington Mutual in 2008. Isaac argues that at the core of banking issues is fiscal imprudence by the U.S. Congress which has caused inflation and rate volatility. Filmed on August 16, 2023.
Today’s interview is sponsored by Blockfills, a crypto trading solutions and financial technology firm.
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William "Bill" Isaac is Chairman of Secura/Isaac Group, a global advisory firm serving the financial services industry. Bill has an unparalleled career in the financial industry and public service, spanning over 50 years. He served as Chairman of the Federal Deposit Insurance Corporation (FDIC) from 1978 through 1985, working to maintain stability during the banking and thrift crises of the 1980s, when over 3,000 banks and thrifts failed. He also served as Chairman of Fifth Third Bancorp. For more information on Bill's past and current work, visit securaisaac.com
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Timecodes:
(00:00) Introduction
(00:31) Bill's Early Journey To The FDIC
(03:23) Anatomy Of A Bank Failure
(12:40) Does Technology Hasten Bank Runs?
(21:30) Impact of High Interest Rates On Banking System
(31:01) Fiscal Policy Is Out Of Control
(40:48) Federal Reserve Should Play A Role In Fiscal Matters, Says Former FDIC Chair
(49:07) Is Inflation Itself, And Not Debt, The True Problem? (Modern Monetary Theory)
(56:10) Two Reasons Why Banks Fall (On Asset Side): Credit & Duration
(01:08:28) Are Banking Issues In The U.S. Systemic?
(01:16:42) Debating The Need For Zero Interest Rates After the 2008 Great Financial Crisis (GFC)
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.Timecodes:
