Segments of the U.S. banking industry show signs of recovery, although they may yet face some loss before the economy ultimately bottoms out, Federal Deposit Insurance Corp. (FDIC) chair Sheila Bair said in a speech Thursday, Bloomberg News reported. However, the future is no less certain. Rising unemployment and continued economic weakness could take the wheel from the hands of so-called “exotic” mortgage products, which are typically blamed for borrower non-affordability and rising delinquencies, Bair said, according to the news bulletin. Bair sees the industry no longer in a crisis stage, but entering the cleanup stage, with regulators implementing procedures to provide stability and liquidity. She praised the Federal Reserve and Treasury Department, in particular, for unpopular but necessary roles in the process, Bloomberg reported. The speech also served as an update on several key programs. A trial phase of the new Public-Private Investment Program (PPIP) is slated for June, with regulators intending to be “very careful…very transparent” in making sure the program gets off the ground without conflict, Bair said. She also says the FDIC does not expect losses from the Temporary Liquidity Guarantee Program, through which the institution backs debt issued by banks, according to Bloomberg. In reality, so far, the FDIC collected $7bn in premiums from the program, she says. Bair used the speech to again call for the creation of an institution to exercise regulatory power over non-bank firms to ensure no institution grows “too big to fail.” Bair said the FDIC has the capacity to serve as such a regulatory power to break up and shut down non-banking entities. “I think we would be a logical place for that,” she said, according to Bloomberg. “We aren’t asking for it, but we know how to close an institution. And we’re equipped for it.” Write to Diana Golobay at [email protected].