BANK DEREGULATION
by Bud Buck, 12/24/99

Dc: The President is expected to sign new banking laws that do away with regulations imposed after the great 1929 crash that marked the beginning of the depression. Under the new law, banks can sell insurance and securities ... something that was prohibited by the Glass/Steagall act.
Critics say we're "unlearning" the lessons of the depression, and setting ourselves up for a fall. But advocates of the change say this will keep the American banking industry in step with global competition.
Is this what the banking public wants? Bud Buck reports.

(sfx: outdoors)
(sfx: crowd chanting "2-4-6-8, vertically integrate")

Bud: Just last year, Mom and Pop's Bank was the scene of raucous demonstrations as militant customers demanded that this small community institution "get with the times" and merge with Mega Bank, a global financial corporation. But the founder and president of the bank, "Pops," resisted the pressure, at first.

Pops: But then I noticed how those long-time customers of mine cheered up when they talked about merging with a global corporation, and how they had come to resent the hometown, personal service I'd been giving them ... and it got me thinking about our business and what we're supposed to be doing.

Bud: In the weeks that followed, Mom and Pop modernized their operation, renamed the bank MaPaCo and began looking for other banks to acquire.

Pops: We even got some New York lawyers working on setting up a holding company so we could acquire brokerage houses and insurance companies and such.

Bud: And now ... with the repeal of the Glass-Steagall Act, the financial services industry will shift even more profoundly. And in stark contrast to their more tentative approach when it was called Mom and Pop's Bank, the reinvigorated leadership at MaPaCo is enthusiastic about taking advantage of the changes.

Pops: Every business wants to provide full service now! We want to be your money manager, Insurance agent, HMO, personal trainer, home decorator, landscaper, eyeglass specialist, barber, beer advisor, lawn coach ... When we were Mom and Pop's bank, we were just trying to be the bank. That had to change.

Bud: But not everyone agrees. Just as some customers have pushed MaPaCo to be more adventurous, others have become skittish at the prospect of their local bank in a deregulated financial services sector.
There's been some backlash. On Tuesday afternoon, just before Christmas, a group of depositors showed up at MaPaCo to demand their sizeable deposits be handed over ... in cash.

(sfx: surly crowd up)

Customer 1: I want my savings! Now!

Customer 2: Me too! Hand it over!

Bud: What happened next ... was as heartwarming and uplifting as anything this reporter has ever witnessed. "Pops" climbed up on a chair and spoke to the unruly depositors ...

(pops slightly off mic) Now, now, now ... just a minute.

Customer 1: We want our money!

(sfx: surly crowd up and down)

Pops: Well you should know better than that! Your money's not here!

(sfx: surly crowd up and down and up)

Customer 2: I knew it! He's stolen it!

Customer 3: He's thrown it away!

Pops: No, no, no! Your money is ... out there. It's working!

(sfx: surly crowd down)

Customer 2: It's working?

Customer 1: What's it doing, Pops?

Pops: It's doing more than it ever could before, Hank! It's in Alfie's remodeled front porch. And the new water heater for Terry's place. It's in the big insurance payoff that Lucille is getting for her poor, dead husband. My sympathies, Lucille! How the bolt worked it's way out of that railing, we'll never know.

(sfx: surly crowd up and down)

Where's the money? We loaned some of it to Johnnie to set up the web site where you can talk to real cowboy girls, live. It's in that crazy derivatives stock scheme that Lou has just got into. I still don't understand that, Lou. How's it going?

Lou: (off mic) I've still got my shirt!

Pops: Well keep it on, keep it on.

(sfx: surly crowd laughs a bit)

Customer 2: Where's MY money?

Pops: We're using it to prop up Mary's day trading. She'll be a millionaire as soon as she can figure out how to stop buying and sell it all at just the right time, isn't that so, Mary?

Mary: (off mic) That's right Pops!

Pops: Don't you see? Your money is busy doing a hundred million different things all over the world! It's lobbying in Washington, financing the re-election of friendly members of the banking committees and paying off foreign potentates. It's in price fixing schemes for pork bellies and wheat futures! The Russian mafia is using it to produce bootleg Vodka! It's going to Swiss banks to get laundered, it's buying arms for insurgents in Afghanistan ... It's way out there, away from this one horse town, and it's taking wild chances you'd never take yourself!

Customer 1: And we're losing thousands every day!

Pops: Now, now, now! Don't be so gloomy! If we hit the jackpot on just one ... just one! Then everybody gets paid! How about that, huh?

(sfx: reassured crowd sounds)

Isn't it wonderful to be alive right now? To be alive and fully invested in a Global World?

Bud: (anncr) Of course, we all recognize that Pops was taking a page from George Bailey's book in the movie "It's a Wonderful Life."
But that ... is a fantasy. In the NEW global financial environment ... George Bailey wouldn't even BE at his local bank. He'd be in New York. Or Tokyo. Or Brussels. They'd have to call him, or e-mail one of his minions to complain. The only people at the local office would be clueless tellers and security guards with guns.
But ... fantasies can be useful. They tell us about ourselves. Our fears, our hopes ... they can give us an image of the sort of world we'd like to create, or provide a shimmering picture of a world we wish we still had, although it may be one that never was.
Which is which? And where? And when? I don't have answers to any of those questions, and whether or not I ever will ... Time will tell.
This is Bud Buck!

Dale Connelly Reporting Home