Gruenberg, 60, the head of the nation’s banking-deposit insurance fund, is still confronting the aftershock of the 2008 financial crisis. As FDIC chairman, he faces the challenge of closely monitoring the health of the nation’s financial institutions at a time when 600 banks remain on the problem list and in danger of failing. When they do go under, FDIC steps in as the cleanup crew. It administers the shuttering of the institutions and pays out depositors.
Under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the agency is charged with closing a failing systemically important financial institution in an orderly way without bailing it out or causing the kind of widespread havoc in the financial system that happened in 2008.
Whether FDIC and the government would have the will to use such authority remains a hot point of contention, but Gruenberg insists the agency could and would take such action. “Not only do we have the will but we now have authorities to develop the capability to carry out those responsibilities,” he said. “We think we have developed a strategy that will allow us to manage an orderly resolution of a systemic financial company.”
Gruenberg’s agenda remains focused on working with other agencies to finalize key regulations under the reform law meant to improve the health of the financial system, including measures aimed at the problem of financial institutions considered “too big to fail.” “The issue of dealing with too big to fail is certainly one of the key issues that we have to address coming out of the financial crisis,” he said. “Our focus has been on implementing the new authorities we have under Dodd-Frank that are targeted on that issue.”
Gruenberg joined the FDIC board in 2005 and served as a member and vice chairman until he was confirmed as chairman in November. Gruenberg previously served as a senior aide on the Senate Banking Committee under then-Sen. Paul Sarbanes, D-Md.
Gruenberg grew up in the Bronx, N.Y. He holds a law degree from Case Western Reserve Law School and a bachelor’s degree from Princeton’s Woodrow Wilson School of Public and International Affairs.