Vol. 00-9

 Readers’ Turn

              One of the nice things about writing these reports on banking public policy issues is the give-and-take generated with readers, through personal meetings and correspondence.  Almost without exception, readers’ comments reflect a deep knowledge of, and strong opinions on, particular issues.  Possibly I should not admit it, but this is particularly helpful when they challenge either the completeness of my report, or the logic of its conclusions.  It occurred to me there have been a few letters recently that other readers might enjoy, and possibly even find useful.  That, at least, is the premise of this report.

              Although it does not happen often, on occasion I have admitted to some uncertainty about the proper resolution of a banking public policy issue that I had been following.  One such instance was in the report titled “Banking Public Policy and the New Technologies” (Vol. 2000-6), where I focused rather narrowly on whether there is a clear linkage between recent technological changes in banking and changes in banking public policy.  Readers may recall that although my initial inclination was to regard technological change as of importance only in a business or operational sense, I wound up concluding that there was indeed an important public policy linkage.  Still, enough uncertainty remained, at least in my mind, that I urged readers with opinions on this question to drop me a line, promising to include their thoughts, with permission, in a future report on this subject.

              In another case I found upon reviewing my mail that as a result of a flow of readers’ comments, both oral and written, I had begun to treat seriously a subject I had introduced initially only as one of several possible examples of Washington’s habit of creating reality out of perception.  In a report titled “Perception is Nine-Tenths of the Law” (Vol. 2000-5), I said that among the perceptions that had begun to take on the appearance of reality was one that held that either the FDIC or the Federal Reserve is the designated “crisis manager” when serious banking problems loom.  But I noted, probably a bit flippantly, that the relevant statute when it came to banking crises (The Federal Deposit Insurance Corporation Improvement Act of 1991) seems to put the principal authority in neither agency but, rather, in the Secretary of the Treasury.  As it turned out, I found the subject of crisis management to be of increasing interest and have since made mention of it in three subsequent reports.

              Most recent letters from readers were in response to my request for views on the relationship between technological change and the evolution of banking public policy.  Some of these comments appear in Section I.  The evolution of the crisis management issue is covered in Section II.  A concluding section is not really called for because I have not yet worked out fully, in my own mind, where my position is with respect to the foregoing issues.  However, I do want to share a letter from a long-retired ABA official, giving his reaction to the most recent ABA annual convention.  I have included it in this report primarily because it is a heart warming, nostalgic piece that made enjoyable reading for me, as I think it will for older readers – after all, this is the 34^th year for these reports – and I have a hunch that younger readers may enjoy it as well.  It appears in Section III.