Failed bank? No problem…Just Biz as Usual


Fabulous article in the LA Times about a bank failure that is Not The Classic Bank Failure People Envision. Here is one taste:

Yet when it all came crashing down, the pain was muted, the repercussions muffled. Federal regulators moved in so swiftly and efficiently that hardly anyone noticed until it was over. The new owners cleaned out the management ranks, but tellers and new-account specialists — the public face of the institution — stayed on. There was no run on the bank. Only a handful of uninsured depositors lost money.

Ruined lives and public disgrace were staples of the classic 1930s narrative of a bank failure. In the new century, the shame and suffering have been obscured by bigger forces, subsumed in abstractions: the global credit squeeze, the liquidity crisis.

But I think this is my favorite:

Tom Vessey, fired as chief executive five months before 1st Centennial failed, pointed out to those who asked that the bank’s board never accused him of any wrongdoing. He continued to allow his Italianate mansion to be used for fundraisers, showing off his garage filled with Route 66 memorabilia and awards won by his half-Arabian show horse, Ring O Fyre.

Seriously, how do you get mad at a man who was just playing by the rules? Good Businessman only play by the rules given to them by the politicians. Why don’t we begin to look at the root causes of our country’s problems and see where the regulations the banks were forced to follow came from? I have an IDEA!!!! Let’s look at Barney Frank, Chris Dodd, Fannie Mae, Freddie Mac,…

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