FDIC Chair: Bank Assets Undervalued

FDIC Chair Sheila Bair said in an interview with NPR that she believes bank assets are almost certainly undervalued.

[NPR's] Kai Ryssdal: There is a supposition here, isn't there, that the toxic assets will eventually become non-toxic (for want of a better word) at some point, right?

BAIR: Well, I think they will certainly be worth more than the current valuations. I think that is the assumption. And I think that's true. I mean, at the FDIC we sell troubled bank assets all the time. You know, when banks have to be closed, we take over as a receiver, so we're pretty familiar with the market right now. So we think that that is absolutely true that the assets are worth more than the current market conditions assign to them. And so that, yes, over time there will be significant profits from these.

Hmm. So I guess they don't need more capital after all, right?