In an interview with Reuters, Ms Bair said that while she would personally be ashamed to be drawing a large salary for a company that was performing poorly, regulation needed to focus on larger problems.
"I don't think it should be about punishing somebody," said the FDIC chief. "It should be forward-looking and aligning regulatory responsibilities according to what makes sense for institutional structure itself."
Ms Bair went on to say that FDIC is currently focusing on giving the government the power to close down sizeable financial institutions that become insolvent and stated that work on the issue is moving "in the right direction".
Last December, the FDIC increased its corporate operating budget for 2010 by $1.4 billion to $4 billion â a move it said was necessary because of potential for further bank failures this year.
By Asim Shah