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.
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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.
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