The former chairman of the Federal Deposit Insurance Corp., William M. Isaac, says the current turmoil in financial markets is not remotely comparable to the Great Depression.

He disputes even the notion of a crisis.

“If there is a banking crisis, I have seen no evidence of it. I can count on my fingers and toes every sizeable bank about which I have had any concern during the past year,” Isaac wrote recently in The Wall Street Journal.

By comparison, Isaac says, during the 1980s and early 1990s, the U.S. suffered from

4,000 bank and savings and loan failures. There were still more than 1,430 banks on the FDIC’s “problem list” by the end of 1991.

“I’m sure the problem banks list will grow during the next year, but it totaled only 76 at last count,” Isaac says.

“Banks continue to have incredible access to the capital markets and over 99 percent of banks are considered well-capitalized by regulators.”

Additionally, Isaac says, a 20 percent decline in housing prices was not really all that big of a deal economically for the U.S.

The widely cited S&P/Case-Shiller home-price index declined 14.4 percent in March from a year earlier. The gauge has fallen every month since January 2007.

Isaac notes that in Sarasota, Fla., where he resides, housing prices increased by 35 percent in one year alone, in 2005.

Isaac argues that such a rate of increase is “unsustainable” and was “pushing housing prices beyond the reach of most people.”

Why is all this happening now? Politics, says Isaac.

Americans have been “spoiled” by 25 consecutive years of prosperity and, during this year’s election cycle, one in which a Democrat has a chance to take over the White House, “roughly half of the population wants us to feel angst,” he writes.

Some economic experts agree with Isaac’s assessment of the banking industry.

“Asset bubbles result in the misallocation of capital, which adversely affects economic growth,” Donald P. Gould, president of Gould Asset Management, tells Moneynews.

“Probably it is safer to let the market undo its own bubble.”

Federal intervention in the market could result in a deflationary period just like that seen in Japan during the 1990s.

“Witness what happened when the Bank of Japan pierced the Japanese real estate bubble,” says Gould. “A decade-plus of recession.”

Ken Kamen, president of Mercadien Asset Management, tells Moneynews that an overreaction is not needed, as, ultimately, “market forces will decide where money needs to be.”