Bair, though appointed by President Bush in 2006, has curried favor with
Washington Democrats by criticizing Paulson for not pressuring banks to modify
mortgage terms, which would allow more troubled borrowers to stay in their
homes and help stabilize home prices. President-elect Barack Obama and his Democratic primary rival
Hillary Clinton both pushed loan modification programs as an essential element
of resolving credit market turmoil.
Bair also sided with Federal Reserve Board
Chairman Ben Bernanke to convince Paulson to inject capital directly into banks,
which is now the focus of the Treasury's $700 billion program to rescue the
financial industry. Paulson had proposed making bad asset purchases the
centerpiece.
Before taking the FDIC helm, Bair
was a professor of financial regulatory policy at the University of
Massachusetts at Amherst. She also has served as the Treasury Department's assistant
secretary for financial institutions from 2001 to 2002. Her posts also include
working as an in-house lobbyist for the New York Stock Exchange from 1995 to
2000, commissioner and acting chairman of the Commodity Futures Trading
Commission from 1991 to 1995 and aide to former Sen. Robert Dole. She also ran
for Congress in 1990, but lost the Republican nomination in her Kansas district.
Washington sources continue to
insist, however, that the leading candidates to run Treasury are Larry Summers, a
Clinton era treasury secretary, and Timothy Geithner, current New York Federal Reserve Bank
President - Bill McConnell
Bill McConnell is The Deal's Washington bureau chief.
Federal Deposit Insurance Corp. Chairman Sheila Bair is a dark-horse candidate
to succeed Treasury Secretary Henry Paulson when the Bush administration ends. 
