FDIC's Bair fears she's a jinx for markets

WASHINGTON (Reuters) - Sheila Bair, widely lauded for her cool regulatory head amid crumbling financial markets and a rising tide of bank failures, says she should stay out of government jobs. She said she's jinxed.

"I joke that I should stay out of government service because everything I do, something bad happens," Bair, the chairman of the Federal Deposit Insurance Corp, told the Reuters Washington Summit.

She also hinted at letting someone else fill her shoes as a top bank regulator, but said that time has not quite come.

"I think these jobs are not things you should do for a lot of time. I think bringing in fresh perspectives is always important," Bair said.

"I'll be like Scarlett O'Hara. I'll think about that tomorrow. Because we've got a lot to do right now."

Bair, a 55-year-old Republican from Kansas, was plucked from academia in Massachusetts by former President George W. Bush to head the FDIC in 2006.

She has become a darling of Democratic lawmakers, however, for her early warnings about the looming subprime crisis, and continued on after Democratic President Barack Obama took office in January 2009.

Bair maintained bipartisan support in Congress while locking horns with other regulators and top policymakers by wanting to take a tough stance with bailouts of individual Wall Street firms.

Her hard stance serves as a contrast to her other role as a children's book author. "Rock, Brock and the Savings Shock," was published in 2006 and her second book, "Isabel's Car Wash," was published in 2008.

Before helming the FDIC during the worst financial crisis since the Great Depression, Bair served as a Treasury Department official from 2001 to 2002.

Those were rough years, too.

"I went to Treasury in 2001 and then we had 9/11 and Enron, and what I thought was going to be a 9-to-5 job as the assistant secretary for financial institutions turned into another 24/7 situation," Bair said, referring to the September 11 terrorist attacks and the collapse of giant energy company Enron.

During her tenure at the FDIC, Bair has seen the number of bank failures reach the highest level in 17 years and the agency's insurance fund dip into the red, not to mention the near-collapse of the entire financial system.

Bair said her worst moment came when mortgage lender IndyMac failed on July 11, 2008, after a run on the bank.

"This was the first significant bank failure for anybody to remember, and the media hype over the weekend and then seeing folks knocking on the window because the institution had been closed, that was just devastating to me," she said.

She was especially upset because the FDIC had already started a campaign, involving celebrity personal finance guru Suze Orman, to let the public know that their investments were safe, even when banks fail.

"And just to see people so scared and running to the bank after it had closed. There's no place in the world that was safer to keep your money than once we had started operating the bank. I think that was a low point and we really got on the dime," Bair said, commenting about how the FDIC really stepped up its public information push after Indymac failed.

Bair did not put a timeline on when she thinks her job will be done at the FDIC. But she has already put some thought into her next move.

"I think the day when I move on, I'll probably go back into academia or perhaps nonprofit work," she said. "But right now I have my hands full."

(Reporting by Karey Wutkowski, Editing by Chizu Nomiyama)