May 18, 2009 
Small, Dull, Solvent
You didn't have to be a small community bank to steer clear of the 
helter-skelter investments favored by the likes of Bank of America and AIG. But 
apparently it helped. 
 
New York Times reporter David Segal writes that spending time with solvent 
bankers in places like Indiana was like stepping into an “alternate universe,” 
a place “where everything sounds a little strange because it makes perfect 
sense.”
 
Weird that it's strange, eh? Sensible should be normal. 
Turns out, the secret is to be boring. Clay Ewing, a banker in Jasper, says, 
“If banking gets exciting, there is something wrong with it.” So, no maniacal 
juggling of hyper-complicated subprime debt instruments just for the thrill of 
it.
 
Boring bankers also tell Segal: “If you don't understand the risk you're 
taking, don't take it.” Also: “We want to be around for decades, so we're not 
focused on the next quarter.” 
 
Today, banks that abided by such common sense are solvent. And declining 
government bailout money. 
Profligate bankers propelled by visions of infinite if inexplicable returns 
were not the only culprits in the housing bust. The Federal Reserve stoked the 
buildup of demented debt. As did many politicians. 
 
But bankers who made bad decisions also deserve blame for surging blindly 
ahead. They could have done otherwise. They could have been, well, boring. 
 
This is Common Sense. I'm Paul Jacob. 
 

  

Paul Jacob is President of Citizens in Charge and the Citizens in Charge 
Foundation, which sponsors both Common Sense and Paul's weekly Townhall Column. 
The opinions expressed in Common Sense are Paul Jacob's and do not necessarily 
reflect the opinions of Citizens in Charge or the Citizens in Charge Foundation.

   








      
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