ABA Banking Journal - November 2008 - (Page 66)

100YEARS FIRST PERSON Weathering the storm The current situation is daunting, says ABA’s CEO, but the industry will emerge stronger A s we celebrate ABA Banking Journal’s 100th anniversary, the nation is in one of the economic crises that periodically befall our country. Every day seems to bring scarier headlines that fuel public anxiety. The current crisis began largely outside the banking industry—with brokers sending mortgages to Wall Street to be securitized. But it’s affected the entire financial system, including banks. When times are good, it seems like things can never go downhill. And when times are bad, it seems like things will never improve. In my nearly 25 years at ABA, our industry has faced major challenges, but it has always come through—and come through stronger. I’m confident that will happen again. This will be a watershed period in banking and banking policy that sets the course for our future. It won’t always be easy or pleasant, but we can emerge the better for it. As I write, the challenges are already large and somewhat ominous. Major legislation over the next two years is a near certainty. It’s impossible to envision a new Congress and new Administration tackling these enormous and complex challenges without broadly reworking the entire system of mortgage finance—especially given the involvement of very powerful interest groups. Not just bankers, but Realtors, homebuilders, and others. There will also be a significant restructuring of the regulatory system. At a minimum, the Federal Reserve will be given even broader powers. But with the upheaval in the marketplace, the calls for more regulation of the financial services industry, and the renewed populist mood in the country, we face a real risk of increased regulatory burdens. All the while our battles with governmentadvantaged competitors—credit unions and the Farm Credit System—will continue. While this is daunting, to say the least, there are other, more positive trends we will be reinforcing. Banks remain the backbone Over the 100 years that ABA Banking Journal has been in print and educating bankers throughout the decades about the industry’s triumphs, trends, and tragedies, the Dow-Jones has had similar— sometimes spectacular—ups and downs. But despite recessions and depressions, inflation and deflation and stagflation, the economy has not only always bounced back, but emerged even stronger. Our industry has weathered those storms too. In this recent turmoil, the importance of banking and bankers has been clearly demonstrated. Strong, safe institutions in which bankers make sound credit decisions and serve their communities remain the backbone of the country and the foundation of the economy. Well-capitalized banks have been able to assist in the takeover of troubled investment banks and other banks, easing pressure on both taxpayers and FDIC. Americans are a remarkable people. For all the talk about red states and blue states and such, when times are toughest, the nation pulls together. The victims of hurricanes that have devastated parts of the South have found temporary homes, schooling, and lasting friendships in distant cities and states, where residents took them in. Regardless of how people feel about the war in Iraq, there’s unqualified support for soldiers fighting oversees. And none will forget how the nation united in the wake of 9/11 seven years ago. The banking industry is, in many ways, a microcosm of that diverse nation. From the biggest institutions that run global economic engines, to regionals that strengthen our cities and their citizens, to the community banks that build small businesses and fund dreams, they all compete aggressively in the marketplace and play to win. But theirs is a shared fate, and the industry fares immeasurably better when it pulls together. I firmly believe the industry won’t slowly drift down. ABA’s dedicated staff and the fine bankers from across the country who lead the organization that I am proud to serve won’t let it. Nor will the thousands of bankers who make time to work on its behalf from the grassroots up. And ABA Banking Journal will be there, as since 1908, to tell the tales and document the enduring legacy of bankers who have made this special profession their lives’ work. BJ Edward L. Yingling Ed Yingling has been ABA’s CEO since May 2005. Even the monumental effort involved over years to secure passage of the Gramm-Leach-Bliley Act pales in comparison to the leadership challenge posed by the events since Labor Day. And they came on top of a year with an unprecedented number of bank legislative and regulatory proposals. Yingling and his team at ABA, including the welcome staff additions from America’s Community Banks, with which ABA merged last December, have kept the balls in the air and won notable victories, outlined on page 22 in ABA Chairman Brad Rock’s farewell column. By Edward L. Yingling, president and CEO, the American Bankers Association 66 NOVEMBER 2008/ABA BANKING JOURNAL Subscribe at www.ababj.com http://www.aba.com/default.htm http://www.ababj.com

Table of Contents Feed for the Digital Edition of ABA Banking Journal - November 2008

ABA Banking Journal - November 2008 Contents Editor's Column Banking 2.0: Credit, Banking's Essence, Set for Rethinking Snapshot: The Few, the Proud, the Banks that Can Raise Capital Will Strong and Simple Banks Inherit the Business? Back to the Future ABA Resources ABA Chairman's Position Farm Lenders Must Take Care When Lending in Indian Country Pass the Aspirin Into the Breach Adventures Across A Century What the Future Holds, Post Crisis Paul Volcker: A Financial Legend Still Speaks Strong Ed Yingling: Weathering the Storm Dick Kovacevich: "Boring" Banking to Dynamic Financial Services Jim Culberson: Community Banking: What has Changed and What Shouldn't Walter Shipley: How a Chemical Reaction Helped to Mold Today's JPMorgan Chase William Isaac: Challenges and Opportunities Ahead for Banks A Hundred Years from Our Pages Eight Tech Innovations that Brought Banks into 21st Century Bank Cherokee: Third Generaton Marks 100th Year The First National Bank of Altavista: Railroad Gave Birth to a Town, a Hope Chest, and a Bank Rosedales Federal Savings and Loan Association: How a Friendly Game of Cards Turned into a 100-Year Mutual New Washington State Bank: Cooking Up the Next 100 Years Mailbox Banker's Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - November 2008

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