AMES, Iowa – Thomas Hoenig posed a question during a presentation this past spring to the Boston Economic Club – can we end financial bailouts? His answer to that question was likely not popular with many large financial institutions.
Hoenig, vice chairman of the Federal Deposit Insurance Corp., is a strong advocate for ending bailouts. In his remarks, he explained that all firms, regardless of size, should be made eligible for bankruptcy and not dependent on the government should they fail. Hoenig is expected to talk about the challenges of making such changes a reality as part of the Stafford Lecture Series on Banking in Iowa State University’s College of Business.
The Iowa State graduate and Fort Madison native will present “Leveling the Playing Field” at 11 a.m. on Friday, Nov. 7, in the Stark Lecture Hall, 1148 Gerdin Business Building. The Iowa State Alumni Association featured Hoenig this summer in its “Visions Across America” series. He shared how his Iowa roots have influenced his views on the economy.
“I was at the bank during the banking crisis of the ’80s and the farm crisis of the ’80s and the energy crisis of the ’80s and the real estate crisis of the ’80s and saw all the damage that did, first of all to the banks that made the loans originally thinking that prices would never go down and interest rates would never go to 20 percent. So that had enormous influence on my thinking through this round,” Hoenig told VISIONS.
Hoenig was confirmed by the Senate as vice chairman on Nov. 15, 2012. He joined the FDIC in April of that year, as a member of the FDIC Board of Directors for a six-year term. Prior to serving on the FDIC board, Hoenig was president of the Federal Reserve Bank of Kansas City and a member of the Federal Reserve System’s Federal Open Market Committee from 1991 to 2011.
Hoenig was with the Federal Reserve for 38 years, beginning as an economist and then as a senior officer in banking supervision during the U.S. banking crisis of the 1980s. In 1986, he led the Kansas City Federal Reserve Bank’s Division of Bank Supervision and Structure, directing the oversight of more than 1,000 banks and bank holding companies with assets ranging from less than $100 million to $20 billion. He became president of the Kansas City Federal Reserve Bank on Oct. 1, 1991.
History of the Robert Stafford Lecture Series on Banking
The Robert Stafford Lecture Series on Banking was established by the College of Business and funded by Ames National Corp. as a part of its 100 years of service to Ames. The lecture honors the late Robert Stafford for his many years of dedicated service to First National Bank and Ames National Corp.