|This story first appeared on the ProPublica website.
In early November 2010, as the Federal Reserve began to weigh whether the nation's biggest financial firms were healthy enough to return money to their shareholders, a top regulator bluntly warned: Don't let them.
'We remain concerned over their ability to withstand stress in an uncertain economic environment,' wrote Sheila Bair, the head of the Federal Deposit Insurance Corp., in a previously unreported letter obtained by ProPublica.
The letter came as the Fed was launching a 'stress test' to decide whether the biggest US financial firms could pay out dividends and buy back their shares instead of putting aside that money as capital. It was one of the central bank's most critical oversight decisions in the wake of the financial crisis.