Battle of the Green Eyeshades

Winston-Salem is home to one large bank, BB&T.  We used to be home to Wachovia but then they went and "merged" with First Union and moved HQ to Charlotte, so we here in Winston have just one major bank that we call our own.  Thus it was with a little bit of hometown pride that I read in today’s paper that the bank’s head honcho sent a letter to the Congress critters detailing why he thinks the bailout stinks.

For John Allison, the high-risk rollers on Wall Street are getting
too much of the ear of Congress and having too much say in resolving
the financial nightmare that they created.

That’s why Allison, the chairman and chief executive of BB&T
Corp., submitted a 14-point letter Tuesday to all 535 members of
Congress with a simple message regarding the proposed $700 billion
bailout.

"There is no panic on Main Street and in sound financial
institutions," he wrote. "The problems are in high-risk financial
institutions and on Wall Street."

He said that it is important that "Congress hear from the well-run
financial institutions, as most of the concerns have been focused on
the problem companies. It is extremely important that the bailout not
damage well-run companies." Allison’s opinion is seconded by local
community-bank officials and community-bank trade groups.

"Community bankers did not create this financial crisis, but our
banks and communities are clearly feeling the impact," the Independent
Community Bankers of America said in a statement. "As the fundamental
drivers of local economies — we could be in a strong position to help
resolve this crisis."

Go get ’em Mr. Allison.

2 thoughts on “Battle of the Green Eyeshades

  1. AMR

    It was a really good letter but I fear the liquidity is needed just to keep money flowing. The fact that many people cannot access loans or credit will only slow down and perhaps even grind to a halt an already crippled manufacturing sector.
    I was watching Morning Joe at the car shop today (it’s my four year olds favorite show . . . not). Anyhow, Scarborough (who I can tolerate, actually, despite our different leanings) takes a moment to remind everyone that it was also the greed of all Americans who contributed to this mess. We had to have the bigger cars, the bigger houses. We had to flip a condo in South Florida. It’s our fault too.
    And I found myself thinking, what??? My car loans have microscopic interest rates. My home loan is a low 30 year fixed rate. Any other obligations that we have are always met on time. And I know I’m not alone. Yes, there are a lot of American consumers to blame, but Joe was painting with far too broad a brush.
    Back to the letter, it did make me proud of our hometown BB&T to learn that the prudent decisions they’ve made over the last 8-10 years have kept them somewhat above (surely they are not 100% removed) all this mess.

    Reply
  2. Jon Lowder

    I agree with you on the broad brush on both ends of the spectrum. While not all consumers behaved irrationally, neither did all bankers. My understanding is that BB&T did have some exposure to the mortgage-based securities, but it was an amount they could afford.
    It is probably true that something needs to be done, but as I stated in an earlier post I really don’t like being railroaded and that’s what the administration was trying to do with their initial proposal. I like that the process of Congressional deliberation has put the brakes on and exposed this thing to scrutiny because the odds of getting something done that doesn’t totally screw us for the future have gone up as a result. It could still end up being a cluster-f***, but at least now we’ll be going into it with our eyes a little wider.
    Of course it also gave the various partisans their opportunity to beat their pet whipping horses (the conservatives can blame the poor, the liberals can blame the CEOs) but that’s a force of nature that will never go away.

    Reply

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