image description

Senseless Panic is a provocative, quick-paced, and thoughtful analysis of what went wrong with the nation’s banking system and a blunt indictment of United States policy.

BUY NOW On sale

For decades, William Isaac’s insights on the U.S. financial system have been featured in leading news publications. Now, you can browse them all in one location.


in leading business publications

[The most recent issue of NGENUITY JOURNAL, published by the leading payments system processor TSYS on whose board I serve, contains an insightful interview with Lisa Servon, professor of urban policy at The New School for Public Engagement. Professor Servon talks about unbanked consumers, her experience working at a payday lender and check casher, and how banks can regain trust. I found the interview compelling and recommend it to you through the link below.]

Here is the link to the full article


[Dick Kovacevich, retired Chairman & CEO of Wells Fargo, is one of the most successful and respected bankers in modern history. He recently provided a wide ranging interview on the secrets to success in banking and on the appropriate role for financial regulation. The interview was conducted by Daniel Emmanuel, founder and head of The Asian Banker.]

Link to the video:

Underwriting the Next Housing Crisis By Peter J. Wallison Posted: Nov 3, 2014

[I urge you to read the following article from the New York Times by Peter Wallison, a Senior Fellow at the American Enterprise Institute, on the relationship between lax underwriting standards on housing loans and volatility in housing prices that hurts those who can least afford to take the hit. Peter’s analysis is spot on.]

WASHINGTON — SEVEN years after the housing bubble burst, federal regulators backed away this month from the tougher mortgage-underwriting standards that the Dodd-Frank Act of 2010 had directed them to develop. New standards were supposed to raise the quality of the “prime” mortgages that get packaged and sold to investors; instead, they will have the opposite effect.

Responding to the law, federal regulators proposed tough new standards in 2011, but after bipartisan outcries from Congress and fierce lobbying by interested parties, including community activists, the Obama administration and the real estate and banking industries — all eager to increase home sales — the standards have been watered down. The regulators had wanted a down payment of 20 percent, a good credit record and a maximum debt-to-income ratio of 36 percent. But under pressure, they dropped the down payment and good-credit requirements and agreed to a debt-to-income limit as high as 43 percent.


[Dick Kovacevich and I have been friends for over 30 years, having met in 1982 when he was a rising star at Citibank and I was Chairman of the FDIC. Dick retired a couple of years ago as Chairman & CEO of Wells Fargo & Co. I am hard pressed to identify any CEO of any major bank who has had a more distinguished and successful tenure at the helm than Dick. Importantly, he thinks straight and talks straight. Read the following piece by Dick Kovacevich published recently by the CATO Institute, which can be accessed through the following link]:

Here is the link to the full article


[This article by Alex Pollock, Resident Fellow at the American Enterprise Institute, is absolutely must reading for those trying to make sense of what went wrong during the 2008-2009 financial crisis. As you read it, recall that government leaders proclaimed publicly during the crisis of 2008 that the financial system was facing “financial Armageddon” and also recall that mark to market accounting imposed senseless and massive paper losses on U.S. financial institutions during 2008.]

‘The American Banking System Might Not Last Until Monday’
By Alex J. Pollock Monday, August 18, 2014
Filed under: Economic Policy, Numbers

Learning from the crises you’ve forgotten.

How good is the human group mind at financial memory? Pretty bad.

For example, consider this really striking bit of history: “The then Federal Reserve Chairman made a phone call to the Bank of Japan Governor on that critical Friday night (Saturday in Japan) in August of that year.” The chairman’s “first words were that the American banking system might not last until Monday. The crisis was that serious.”

MEMORY AND FINANCIAL CYCLES By Alex J. Pollock Posted: Jul 16, 2014

[Alex J. Pollock is a resident fellow at the American Enterprise Institute in Washington, DC. He was President and CEO of the Federal Home Loan Bank of Chicago 1991-2004. The article is well worth your time reading. A somewhat shorter version of the article was published recently in the Wall Street Journal.]

Memories fade. It is now five years since the end of the most recent U.S. financial crisis of 2007-2009. Stocks have made record highs, junk bonds and leveraged loans have boomed, house prices have risen rapidly, already there are cries for lower credit standards on mortgages to “increase access.” Unlike the Swiss central bank, which marks its investments to market, the Federal Reserve has designed its own regulatory accounting so that it will never have to recognize losses on its $4 trillion portfolio of long-term bonds and mortgage securities, no matter what. Who remembers that such “special” accounting is exactly what the Federal Home Loan Bank Board designed in the 1980s to hide losses in savings and loans? Who remembers that there even was a Federal Home Loan Bank Board, which for its manifold financial sins was abolished in 1989?

Former FDIC Chief Answers The Question I Asked Bob Corker By Woody Woodruff of the Banking Law Connection, July 9, 2014 Posted: Jul 11, 2014

Nearly a year ago, I had the opportunity to have breakfast with Senate Banking Committee Ranking Minority Member, Sen. Bob Corker [R-TN]. OK . . . the imperative of full disclosure requires that I admit that I was merely one of about 150 people attending an industry group event in Nashville. Sen. Corker, home for the August recess, was making a number of appearances across the state of Tennessee and the event to which I was invited was merely the first of three stops he made that day.

He spoke on a number of topics, but the one to which he devoted the most attention was the conceptual legislation he and Virginia’s Democratic Senator, Mark Warner, were proposing in order to “reform” Fannie Mae and Freddie Mac. Sen. Corker explained his concept of replacing the two government-sponsored entities that facilitate the bulk of mortgage lending in America, with a single new government agency that would function somewhat like the FDIC. As he described it, this new mortgage insurance company would “protect the taxpayers” by having a layer of private capital that would account for the first 10% of the entities’ total capital, and would be the first layer exposed to the risk of default. The federal mortgage “insurance” would not kick in until this private equity layer was exhausted.

Fannie Mae, Freddie Mac Plan Botched: Ex-FDIC Chairman by Mani on Value Walk, July 8, 2014 Posted: Jul 9, 2014

If rule of law in Housing and Economic Recovery Act is not adhered to, future investment in banking institutions will be in jeopardy

By defying and rewriting the terms of conservatorship, the U.S. government acts as a destabilizing force, notes William Isaac, former FDIC Chairman.

In an article published in The Wall Street Journal, William Isaac, former chairman of the Federal Depositor Insurance Corp. points out FHFA could have put Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) into receivership instead of conservatorship.
Government’s violation of law by seizing profits of Fannie Mae, Freddie Mac

Fannie, Freddie conservatorship hurts investors, destabilizes mortgage market by Trey Garrison, July 7, 2014 Posted: Jul 9, 2014

In the pages of the Wall Street Journal on Sunday, the former head of the Federal Deposit Insurance Corp., William Isaac, takes the government to task on its virtual third-world, banana republic treatment of GSE investors.

The FHFA as conservator is a fiduciary—or trustee—for the shareholders of Fannie and Freddie. Its job is to, as the law says, “conserve [the enterprises’] assets and property” for shareholders while Fannie and Freddie rebuild their capital base and eventually exit the conservatorship.

Here is the link to the full article

HOW MUCH ARE WE WORTH?? $80 TRILLION? By William Dunkelberg Posted: May 27, 2014

Bill Dunkelberg, Chief Economist of the National Federation of Independent Business, wrote the following article which he has authorized me to publish on my website. His article questions a recent announcement by the Federal Reserve that U.S. consumers are now wealthier than at any time in history despite the weakest and slowest economic recovery since the Great Depression. It’s worth your time to read and reflect on the article.


Bill Dunkelberg, Chief Economist, National Federation of Independent Business

The Federal Reserve recently announced that consumers were now wealthier than at any time in history, this in spite of the weakest recovery from the worst recession since the 1930s. To calculate