What did you do? You don’t have to tell me your job title, but what was your job?
I was working on resolution planning, which are plans that major financial firms have to give to regulators for dealing with stress events. A resolution plan presents a strategy for the firm to wind itself down during financial stress. I was one of several people brought on in the past year to help FDIC improve their processes on that, particularly if the Federal Deposit Insurance Corporation (FDIC) would be in the situation of having to take the big firm over. My team focused on the 8 biggest firms, called Global Systemically Important Banks (G-SIB). If the FDIC had to step in, we would have to determine a different strategy to what the firm itself proposed.
How did you find your way into federal service? Did you always want to join up?
A former boss of mine in the private sector worked for FDIC, and thought I would like it. I’ve worked on writing these plans for financial firms for over 10 years before I started there. Prior to working in resolution planning, I worked for a major investment bank, supporting traders of credit default swaps. I had a front row seat for the 2008 financial crisis. After that experience, I liked that I was part of a solution to problems with financial stability by working in resolution planning, and being at FDIC would be the pinnacle of that work.
You don’t have to come from private sector, but last year FDIC made a point of bringing in people with that experience after the 2023 bank failures.
What did this work mean to you? Why was it important to you, personally?
My work was focused on bank capital. Think of it as a certain amount of equity a bank needs to stay open. Normally a bank is insolvent if liabilities rise above assets, but regulators are supposed step in long before that happens. I was working to improve that process of figuring out if and when the FDIC would step in, from a capital perspective, and what we would do after. I also worked on improving coordination with overseas regulators. It’s all highly impactful stuff, far beyond anything I would experience working for a big bank, even as a senior executive.
What should be important about this work to Americans? Why does it matter?
In the aftermath of the 2023 failures, investigations were done by the Office of Inspector General (OIG) and the regulators themselves about what went wrong. A failure point was how understaffed the regulators were to deal with major bank failures, among other issues. My coworkers are very talented and dedicated people. They will figure out a way to get all this work done without us, it’s just going to be harder without the subject matter experts that were just let go. All the distractions that keep getting foisted upon them from DOGE are not helping!
What does all of this chaos and dysfunction mean to you? Do you have a sense of how it’s all going to impact your work and your mission?
I have serious concerns about what cryptocurrency can do to financial stability, there’s zero regulatory framework. We’ve been here before with financial firms jumping into credit derivatives, and that ended poorly. I fear a repeat as banks start jumping into crypto, especially if they are trading with their own money to juice profits. The only real “guardrail” was the FDIC keeping the banks out of it, and that’s likely to change, more bag holders. Just because a big financial firm is getting involved doesn’t mean that it understands the risks it is taking. To keep banks out of crypto, all FDIC really did was ask detailed questions about how banks would manage the risks and most banks decided it wasn’t worth the hassle. At least, that was my read from the “smoking gun” that Coinbase have been whining about.
We don’t get severance. I would love to work for them, or another banking regulator, but it’s not clear if any will be hiring anytime soon. I also have restrictions on which banks I can work for, for up to a year, which greatly limits my career options.
I was repeatedly told, in the lead up to this, that I had nothing to worry about. My performance was great – good reviews and performance bonuses, in part because of how important my role was. None of that mattered. I had five weeks left on probation. I don’t hold anything against my managers or division leadership, I know they all tried to save us. The conventional wisdom was that the workforce would be cut through retirement buyouts. One third of FDIC staff are retirement-eligible, or will be by 2027. FDIC also had a higher proportion of deferred resignations than other organizations, around 8%.
At least the job market for my field is good at the moment. Recruiters are, so far, accommodating despite my termination letter saying that I was deemed unfit for public service or whatever, I’m hoping to land something soon, before the bottom falls out of the job market.
GOLIKEHELLMACHINE 