FDIC publishes history recounting challenges, actions taken during 2008-13 financial crisis

A history of the financial crisis, focusing on the response of the Federal Deposit Insurance Corp. (FDIC) and lessons learned from the experience, was released Monday by the deposit insurance agency.

The 278-page volume — Crisis and Response: An FDIC History, 2008–2013 – looks at the crisis in two parts: the origins of the crisis and the use by the agency of emergency authorities to respond to financial market illiquidity and the problems of systemically important financial institutions, and; the challenges the agency says it faced in carrying out core missions. Those include bank supervision, deposit insurance, and failed-bank resolution.

“The purpose of this volume is to present a firsthand account of the important role that the FDIC played in responding to the crisis,” wrote FDIC Chairman Martin Gruenberg in the forward. “We hope it will serve as a guidepost for future policymakers who will someday be called upon to respond to the next period of financial instability.”

Gruenberg’s foreward adds that the history “conveys an important lesson: We must not become complacent when economic and banking conditions appear strong. It is precisely during these times that the seeds can be sown for the next financial crisis.”

The FDIC chairman also acknowledges a predecessor: former FDIC Chairman Sheila C. Bair, “whose leadership was central to the FDIC’s response.”

According to the FDIC, the history outlines two crises that overlapped and were interconnected. The agency said those are, first: the financial crisis in 2008 and 2009, and; second: a banking crisis that began in 2008 and continued until 2013. The history, the agency said, examines the FDIC’s response, contributes to an understanding of what occurred, and shares lessons from the agency’s experience.

In a release, the deposit insurer noted that it conducted similar reviews after the banking and thrift crisis of the 1980s and early 1990s.

FDIC Releases History of Agency’s Response to the Financial Crisis