#Turmoil at FDIC over harassment claims must be ‘dealt with swiftly,’ Bair says

The former chair of the Federal Deposit Insurance Corporation knocked the agency’s current leadership over allegations of widespread sexual harassment, saying that the issue must be “dealt with swiftly.”

Sheila Bair, who led the federal banking regulator from 2006 to 2011, called for “heads to be knocked” over the sweeping allegations of a hostile work environment for women and rampant sexual harassment.

The FDIC, she told The Financial Times on Monday, should be “laser focused on restoring employee morale, energizing employees again.”

“People are not feeling good about the FDIC right now,” she said. “And that breaks my heart.”

“When I left in 2011, we were at the top of the best places to work. Morale was high, turnover was low. It was really an energized agency,” she continued. “That is the agency I know and that is the agency that I that the FDIC can be.”

The agency announced Tuesday that it is launching a “special inquiry” into how its leadership has handled the allegations, following widespread criticism over its response from members of Congress.

Sen. Sherrod Brown (D-Ohio), chair of the Senate Banking Committee, led calls for an Inspector General investigation into FDIC leadership earlier this month, calling the allegations “extremely concerning.”

The House Financial Services committee announced its own investigation into the FDIC last week.

Bair said that more investigation is needed to determine how FDIC leadership was involved in the allegations, but that one possible outcome is the removal of Martin Gruenberg as the agency’s chair.