By Alexander Coolidge for Cincinnati.Com

Former bank regulator and current Fifth Third chairman William Isaac predicted on Thursday that the nation will face another financial crisis in 10 to 15 years.

“We haven’t fixed anything with this legislation – I’ll bet we will have another crisis before I retire or die,” Isaac told a group of students and professors during a presentation at the University of Cincinnati’s College of Business. The former chairman of the Federal Deposit Insurance Corp. lambasted the Bush and Obama administrations respectively for their mishandling of the financial panic in the fall of 2008 and the financial reform that was enacted this summer.

The new financial reform law won’t end “too big to fail” – five banks (Bank of America, JP Morgan Chase, Citigroup, Wells Fargo & Co and Goldman) control more than half the banking industry’s assets. If one got into trouble in the future, the government won’t allow it to fail, Isaac said.

While he initially supported the repeal of the Glass-Steagall Act back in 1999, he now says he would favor reimposing the law that barred banks from engaging in traditional banking as well as investment banking.

“I favored the repeal (a decade ago) because I thought it would foster competition and I thought we were smart enough to regulate them – I was wrong,” he said. “We should go back to where we were.”

Restoring the restrictions would force the largest banks to sell off some assets and operations, which would alleviate the concentration of too many assets in too few institutions, he said.

Isaac predicted 300 to 400 banks would fail before the current crisis resolves – 290 have already failed since 2008. Due to the heavy burden of complying with thousands of pages of new regulations, Isaac also predicted another 1,000 other banks would sell out to larger rivals.

“This is going to be a nuisance to Fifth Third – but it’s going to be an unbearable burden for small banks,” he said.

Isaac, who chaired the FDIC from 1981 to 1985, said the banking and savings and loan crisis of the 1980s was even worse but back then regulators successfully avoided panic despite 3,000 banks and thrifts failing. He lambasted Bush Treasury Secretary Henry Paulson for allowing Lehman Brothers to fail because he didn’t want to bail out another Wall Street firm after selling Bear Stearns to JP Morgan Chase.

“Paulson was too worried about the politics – Lehman was the beginning of the panic,” he said.

Subsequent financial reform has also failed to consolidate the number of regulatory agencies and didn’t provide sufficient independence for the new panel reviewing systemic risk, which is largely composed of regulators from other agencies. He noted the law did nothing to reform Fannie Mae and Freddie Mac, the housing giants that have been put into government conservatorship.

Isaac is the author of “Senseless Panic: How Washington Failed America,” published earlier this year, which chides politicians and regulators for making the financial crisis worse in 2008. Isaac, chairman of global financial services at Philadelphia-based consultant LECG, became Fifth Third’s non-executive chairman of the board in May.