FDIC Chairwoman Sheila Bair tackled national politics, regulatory overload and WikiLeaks during a Boston speech Thursday morning, participating in a wide-ranging question-and-answer session that brought out her strong support for community banks even as she defended Dodd-Frank’s many reforms.

Bair praised community banks – even suggesting that supporters consider investing in them – but defended Dodd-Frank as creating a better overall financial system. She spoke at a meeting of The Boston Club, a network that aims to put more women in top business leadership positions. Although the role of women in power played a part of the lively discussion, much of the talk was bank-centric.

Bair scoffed at WikiLeaks’ threats to Bank of America, reassuring the crowd that the bank was sound and questioning the hype surrounding the organization’s threatened data revelations.

She also urged bipartisan support for cutting the national deficit, saying Republicans would have to bend on tax cuts and Democrats would have to compromise on spending, and voiced support for the multi-regulator system still overseeing the nation’s financial system.

In response to a crowd comment from Massachusetts Treasurer-elect Steve Grossman, who attended the event, Bair noted that community banks, for their part, had continued to lend and that supporters could help them by investing capital in those smaller stock institutions. A bigger capital base means the banks can do more lending, she said, adding that investors should do their homework before putting their money in.

Those same banks bemoan the compliance regulations set to come down from the Dodd-Frank Act, but Bair noted that reform also brought good news. FDIC assessments, which are the amount of "premiums" banks pay for FDIC insurance, will be based on asset size instead of their amount of domestic deposits, which shifts more premium burden onto large banks. In addition, FDIC insurance now permanently covers $250,000 in deposits, and new regulations have higher capital requirements for larger banks, which will help level the playing field for smaller competitors.

Thanks to regulatory reform, the bank of the future will – or at least should – be a downsized, more back-to-basics model, she said. Dodd-Frank gets rid of incentives that allowed financial companies to become "too big to fail." With market forces able to work more freely on large institutions, that pressure will create more pressure to downsize and avoid risky, complex business in favor of more basic banking.

The financial crisis revealed that the financial system’s incentives were skewed toward excessive risk-taking, and showed the repeated failure of leadership that was too focused on short-term gains. New compensation and economic incentives will push companies toward long-term success, rather than short-term gains, she said.