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Sheila Bair by Anthony Jenkins

Anthony Jenkins/The Globe and Mail

Sheila Bair and I are eating gourmet falafel burgers at a fancy Mediterranean restaurant in downtown Washington. As you'd expect when lunching with perhaps the most famous deposit-insurance czar the world has ever known, the conversation revolves mostly around financial regulation. But for a moment it turns to guns.

Ms. Bair reveals that in her youth she was a member of the National Rifle Association and that she won a fair share of shooting medals. "I used to have my own 20 gauge shotgun to go quail hunting with my dad," she says.

These days her targets are bigger. Ms. Bair, the former head of the Federal Deposit Insurance Corp., is a spiritual leader of a surprisingly strong – and surprisingly bipartisan – movement to shrink the U.S.'s biggest banks. The image of a young daughter of Kansas scouring the brush for game only strengthens Ms. Bair's credentials to lead Main Street's rebellion against the preparatory-schooled denizens of Wall Street.

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"She's a heroine; she's Joan of Arc," says Jo Marie Griesgraber, executive-director of Washington-based New Rules for Global Finance, a research group that advocates an overhaul of global banking rules. "She has removed the veil on how financial regulation works in straight, plain English so anyone who is interested can follow along …That's phenomenal."

Ms. Bair emerged as a minor celebrity during the financial crisis, generating headlines and gracing magazine covers. In her 2012 memoir, Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself, Ms. Bair recounts how she almost made the pages of Vogue. After sending a photographer to shoot some portraits, the magazine bumped her for Michelle Obama. (There were reports later that a Vogue editor had decided Ms. Bair wasn't attractive enough for the publication's glossy pages, an experience she calls "hurtful." She later made the cut for a "power" edition of Oprah Winfrey's magazine.)

To understand how remarkable it was for someone in Ms. Bair's position even to be brushed by glamour, simply try to name her successor, or the head of the Canada Deposit Insurance Corp. (Answers: Martin Gruenberg and Michèle Bourque, respectively.)

Deposit insurance agencies are vital to the smooth functioning of the financial system. Without them, banks would face cascading withdrawals at the first whisper of trouble. Yet within the constellation of financial regulators, deposit insurance agencies are more like Mars or Venus, dominated by the Jupiter-like presences of the finance ministries, central banks and securities commissions.

During her term at the FDIC, from June, 2006, to June, 2011, Ms. Bair refused to be seen and not heard.

She fought a remarkably public campaign against what she saw as a political establishment that was predisposed to let Wall Street off easy. She called former treasury secretary Timothy Geithner the "bailouter in chief," questioning the rationale for using so much public money to rescue institutions that were "too big to fail." Forbes magazine ranked her the second most powerful woman in the world, after German Chancellor Angela Merkel, in 2008 and 2009.

Ms. Bair lost more battles than she won.

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She has a tendency to speak frankly, which can rankle in official Washington, especially, it must be said, when it's a woman speaking bluntly around a table that is dominated by men.

On only the second page of her book, Ms. Bair takes her first of many swipes at Mr. Geithner, describes former Citigroup chief executive officer Vikram Pandit as a "poor choice" to lead the bank, and says the Wall Street view that former Bank of America CEO Kenneth Lewis is a "country bumpkin" was "not completely without justification." That kind of bluntness wins admirers, but not always friends.

Ms. Bair also invites derision for advocating simple solutions for complex problems, prompting suggestions that while she might be well-meaning, she also can be naive. "I respected Sheila, who improved most of the programs we worked on together," Henry Paulson, another former treasury secretary, wrote in his book about the financial crisis. "But sometimes she said things that made my jaw drop."

Yet unlike Mr. Paulson, Ms. Bair left office with her reputation enhanced, not diminished. History still is undecided on whether to cast Messrs. Geithner and Paulson and Federal Reserve chairman Ben Bernanke in white or black hats. Ms. Bair, on the other hand, is firmly entrenched as a folk hero. Her memoir has sold well enough for her publisher to ask for a version targeted at younger adults.

The book's publication last autumn helped push the arcane debate over financial regulation into the mainstream, and Ms. Bair has helped keep the momentum going as a senior adviser at the Pew Charitable Trusts, a policy research group in Washington, and as chairwoman of the Systemic Risk Council, a Pew-sponsored effort aimed at influencing the debate over financial regulation.

Sherrod Brown and David Vitter, Democratic and Republican senators respectively, have co-sponsored legislation that would force the biggest banks to hold equity equal to 15 per cent of assets, which is much more onerous than current law. An idea that Ms. Bair long has advocated as a way to make the biggest banks less risky – forcing them to hold higher levels of long-term debt – is catching on with policy makers.

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This all adds up to progress. So you'd think Ms. Bair might be feeling better about the state of the world. But she's not, really. When we met previously, for breakfast in December, Washington was on the edge of the "fiscal cliff." A few months later, the "cliff" had been avoided and there was fresh talk of a "grand bargain" to solve the long-term deficit. I asked her for her thoughts. That's how we got on the subject of guns.

Ms. Bair no longer is a member of the NRA. She remembers an organization that promoted gun safety, not the interests of gun makers. The mass slaughter of schoolchildren in Newtown, Conn., is still a fresh memory, yet the NRA is successfully watering down the legislative effort to enact stricter gun control. Lawmakers have abandoned trying to ban assault rifles, and support is crumbling for an ill-fated attempt at mandatory background checks. "What they are doing is really small," Ms. Bair says. "It saddens me."

Her despondency should be a troubling sign for anyone who would like Washington to work better. She's a Republican who appeals to the left; a midwesterner educated in public schools who is comfortable among Ivy Leaguers. If Washington really was coming together, Sheila Bair would be a part of it. Instead, she remains an outsider.

Ms. Bair admits that she would like to return to public service. But while she ran for Congress once, she said she won't do so again because she hates raising money. There are a few Republicans in President Barack Obama's administration, but Ms. Bair doubts she will get a call. "I don't think they want people like me," she says. "There still seems to be a tendency to appease Wall Street."

How did it get so bad? Ms. Bair has a theory. Over eggs and oatmeal in December, she explained what it was like to be on Capitol Hill in the 1980s, when Ronald Reagan and Tip O'Neill, the Democratic speaker of the House of Representatives, made an agreement to overhaul the tax code. That generation of leaders was influenced by the Second World War; many had fought in it. Such experience teaches you to "put country first," Ms. Bair says. "We're the pampered Baby Boom generation. We're not willing to make the sacrifices as much as our parents were."


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Born: April 3, 1954.

Hometown: Independence, Kan.

Education: Bachelor's in philosophy from the University of Kansas in 1975; JD from KU's School of Law in 1978.


Husband: Scott Cooper; college-aged son, Preston, and teenaged daughter, Colleen.

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Career highlights

1981-88: Research director, deputy counsel to Republican Senator Robert Dole.

1991-95: Commissioner, acting chairman, Commodity Futures Trading Commission.

1995-2000: Senior vice-president for government relations, New York Stock Exchange.

2006-2011: Chairman, Federal Deposit Insurance Corp.; published two children's books, Rock, Brock and the Savings Shock and Isabel's Car Wash.


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On the U.S. economy: "Monetary policy is focused on getting people to borrow and spend again. They shouldn't borrow and spend again! They borrowed too much! They need to be saving their money. We need to produce more things and consume less."

On Congress: "I still believe if you take principled positions, a course of action that can be broadly defined as in the country's best interest, at the end of the day you'll be okay. Why do they want to be in Congress if they're not doing that? If it's just to run scared from election to election, why bother?"

On career and family: "If women want it all, they really need a spouse who is willing to share the work. I wouldn't have been able to do this without a supportive husband."

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