* Channel 5 has posted the raw video of Alexi Giannoulias’ statement to the gathered media tonight. At one point, he appeared to fight back tears…
* Giannoulias also issued a statement to his supporters, and it included some fighting words for Congressman Mark Kirk…
Rather than run on his record, Congressman Mark Kirk’s entire campaign to date has revolved around hoping and praying that this family business would fail. Is that the kind of Senator we want, one that cheerleads for an Illinois business to fail while bailing out the Wall Street banks that helped get us into this mess in the first place?
All deposit accounts. excluding certain brokered deposits, have been transferred to MB Financial Bank, National Association (N.A.), Chicago, IL (”assuming institution”) and will be available immediately. The former Broadway Bank locations will reopen as branches of MB Financial Bank, N.A. during regular business hours.
* Alexi Giannoulias plans to hold a press conference tonight at 7 at the Hotel Allegro. Check back. We may have live video.
* Amcore appears to be the biggest bank on today’s seizure list. From ABC7…
“Amcore is another bank on the ropes. It is 3 or 4 times bigger than Broadway. From a business perspective, Amcore is a way bigger story but the detail of a US Senate Candidate makes [Broadway] more interesting,” said Brian Battle, Performance Capital Partners.
Three other Chicago-area lenders — Lincoln Park Savings Bank, Citizens Bank & Trust of Chicago and Peotone Bank — are expected to fail Friday evening. They close at 7 p.m. and announcements of their buyers would take place after that, sources say.
Seven in one day. Well, isn’t Illinois special?
* Here are the costs to the FDIC’s bank-funded insurance fund for each of the seized institutions so far…
* 7:25 pm - From a Mark Kirk campaign spokesperson…
“While years of risky lending schemes, hot money investments and loans to organized crime led to today’s failure, it’s a sad day for Broadway Bank employees who may lose their jobs due to Mr. Giannoulias’ reckless business practices.”
* 7:29 pm - The Giannoulias campaign has updated its “The Truth About the Bank” website with info on how the FDIC insurance system is funded.
* I will probably update later tonight and through the weekend, considering the number of breaking stories today. Also, it turns out that Sen. Bill Brady didn’t have to pay federal income taxes for 2009 because of a provision in the stimulus package. So, it’s all Obama’s fault. Heh.
Anyway, comments are off and I’m gonna go rest for a while.
CBS 2’s Suzanne Le Mignot reports customers are being told Broadway Bank will close after 6 p.m. Friday and will re-open Saturday under a new name. It was not immediately clear if another bank is in line to take control of the bank right away. […]
Sources tell CBS 2 the FDIC will shut down several Chicago banks Friday afternoon.
*** UPDATE 2 *** It looks like the White House got the message that Dick Durbin was trying to send: Get off the dime and start helping Giannoulias…
Obama’s deputy press secretary says the president intends to help Democratic candidates in Illinois “up and down the ballot.” […]
Durbin said Friday that the White House inquired about the state of Giannoulias’ campaign, asking about organization and fundraising. Durbin also defended Giannoulias and says he believes he can win the race against Rep. Mark Kirk.
Banking regulators entered the Chicago headquarters of Broadway Bank after 5 p.m. Friday, the apparent concluding step in the government’s expected takeover of the family-run lender that helped launched U.S. Senate candidate Alexi Giannoulias’ political career.
Two sources with knowledge of the bank’s situation said they anticipated that the government would seize Broadway Bank later this evening. Broadway was unable to raise the $85 million it needed to remain independent.
* Bill Brady’s campaign just issued a summary of his adjusted gross income and the taxes he paid. The document shows he paid no state or federal taxes in 2008 because of a federal tax break. From the campaign…
Brady’s taxable income from 2009 came under a provision of the IRS in 2009 to help small business fight through and survive by allowing the sales of assets.
More from the campaign…
The Bradys paid 22 percent of their taxable income as taxes in the last six reporting periods. They contributed more than six percent to charity during that time.
During the past three years, due to the recession and the unprecedented housing recession the Brady partnerships and combined business’ has lost a significant amount of money. […]
Anticipating the economic downturn, the Brady family began retooling their company in 2006. At its height, Brady Homes employed 34 employees. But facing the new economic reality, the company and staff had to be downsized through tough and painful decisions. The Realty side of the business saw a loss from 150 to 70 employees.
Here’s the summary…
2009
Adjusted Gross Income: $119,910
Taxable Income: $ 49,733
Federal Tax Paid $ -
State Tax Paid: $ 3,309
2008
Adjusted Gross Income: ($116,679)
Taxable Income: $ -
Federal Tax Paid: $ -
State Tax Paid: $ -
2007
Adjusted Gross Income: $372,355
Taxable Income: $318,796
Federal Tax Paid: $ 41,699
State Tax Paid: $ 10,802
2006
Adjusted Gross Income: $130,326
Taxable Income: $ 24,551
Federal Tax Paid: $ 1,228
State Tax Paid: $ 3,610
2005
Adjusted Gross Income $549,685
Taxable Income $466,314
Federal Tax Paid: $124,255
State Tax Paid: $ 20,058
2004
Adjusted Gross Income: $558,798
Taxable Income: $495,517
Federal Tax Paid: $158,454
State Tax Paid: $ 16,622
More later.
…Adding… Commenter “Scooby” wins the comment of the week award for this gem…
It’s a good thing his family business wasn’t a bank.
*** UPDATE 1 *** According to his returns, Brady reported losses of $369,500 in 2008 and $67,033 in 2009.
*** UPDATE 2 *** The initial Tribune story does not even report that Brady paid no taxes in 2008. Interesting.
*** UPDATE 3 *** State Board of Elections records show that Brady loaned his gubernatorial campaign $101,000 on December 31st of 2009. Yet he paid no federal income tax for the year and showed a taxable income of $49,733.
*** UPDATE 5 *** The Associated Press reports that Brady paid no federal taxes in 2009, but does not mention that he paid no federal or state taxes in 2008.
Republican candidate for governor Bill Brady disclosed today that he has not had to pay federal income taxes for the past two years and did not pay state income taxes for his 2008 filing.
According to tax returns made available briefly to the media this afternoon, Brady’s business interests took a significant hit in 2008, causing a net income loss of $116,679. As a result, Brady, a state senator and businessman from Bloomington, did not have to pay any income taxes for that year.
*** UPDATE 7 *** From the Pat Quinn campaign…
Today, after significant pressure, Senator Brady agreed to share several years of his past tax returns with the press. But there were conditions: instead of making copies available to the taxpayers of the state, select members of the media were invited to “view” his returns only for a limited period of time. This sounds more like a glimpse of Haley’s Comet or of a solar eclipse than the full disclosure the public deserves.
The original Tea Party’s rallying cry was “no taxation without representation.” Apparently, Senator Brady misinterpreted this line as “no taxation for elected representatives.” Since the public was not afforded the opportunity to view his returns, it’s likely we won’t know how he managed to pay no income taxes on over $100,000 of income in more than one tax year.
Given his track record—of supporting tax cuts for the wealthy but voting against a minimum wage, and of avoiding taxes on the salaries of his campaign officials—it’s not surprising that Bill Brady believes a different standard should apply to him.
If Senator Brady is this secretive and controlling about basic information like his tax returns, just imagine how he would govern. After two recent scandal-plagued administrations, Illinois residents deserve better.
*** UPDATE 8 *** Brady’s campaign is doing a conference call at 5 o’clock to discuss the issue. Atorney Jason Barickman will be answering questions. Barickman is also the chairman of the Champaign County Republican Party.
* He’s just gonna drag everybody in, apparently. I think I should just send out a blast e-mail to everyone in Illinois politics asking if they’ve been subpoenaed, too…
U.S. Senator Dick Durbin, the chamber’s No. 2 Democrat, said he was subpoenaed by the defense to testify in the June 3 corruption trial of former Illinois Governor Rod Blagojevich.
“Whether I’m going to be called, I don’t know,” Durbin said, adding that he received the subpoena “several” weeks ago. “But, you know, a subpoena is an order of the court to appear. And if I’m called to appear, I will.”
Blagojevich’s lawyers are asking the federal judge overseeing his case to compel President Barack Obama to testify in order to dispute allegations against the impeached governor.
U.S. District Judge James Zagel will consider that request on April 30. White House Press Secretary Robert Gibbs wouldn’t comment on the possibility of the president being subpoenaed in the case.
Durbin said he was interviewed for about 30 minutes “several months” ago by federal investigators in the Blagojevich case.
Last year, Durbin was interviewed by the federal prosecution for the case. At that time he said he had one 10 to 15 minute conversation with Blagojevich about the U.S. Senate seat left vacant by President Barack Obama, which Blagojevich is accused of trying to sell. Durbin said he suggested 10-20 names that should be considered for the replacement.
…Adding… I sent out some e-mails to various spokespersons and just got my first reply. The governor’s office says Gov. Quinn has not been subpoenaed.
…Adding… Senate President Cullerton’s office said he has not been subpoenaed, either.
* Lee Enterprises (which publishes the Post-Dispatch, the Pantagraph and the Southern, among others) reported its third profitable quarter in a row this week. Gannett’s first quarter profits jumped 51 percent. McLatchy and the New York Times also had some good news to report.
Part of the reason for this apparent comeback is that the companies have so aggressively cut staff that their spending is now more in line with the revenues they can reasonably generate. Also, newsprint prices have fallen dramatically, as papers have slimmed way down or gone out of business. The ad revenue depression appears to be slowing, if not exactly bottoming out. And at least one analyst is pleased…
I’ve always stressed that print won’t die though it will shrink and radically change. The problem is the inertia and denial which leads many executives to think that these revolutionary changes won’t affect them but the next generation of leaders at magazine and newspaper companies.
Ironically, the recession accelerated history and the main trends and that forced some print companies to shape up. We saw Conde Nast lay off a lot of people, for example, despite historically having a lot of overhead. We also saw both Gannett (GCI) (parent of USA Today) and McClatchy (MNI) go through some painful steps that explain why in Q1 2010 both companies reported profits. […]
All print companies need more than the iPad to save their bacon. As I’ve long argued, if they really want to come back with a vengeance they would look at how they can leverage video online, which is totally incremental revenue for them (unlike TV and film companies).
He’s mostly right, but there’s still the big problem of reporting staffs stretched to the limit of breaking. What newspapers ought to be doing is clearing out their front offices of the expensive dead weight. It’s the content, stupid. Better content will drive more - and better - eyeballs. Bells and whistles are fine, but strong, timely content is king, baby. The Tribune is probably doing the best job of this of any media company in Illinois. They’ve shown a remarkable willingness to experiment with new ideas, and some of their reporters are eagerly embracing the new online news venues.
But newspapers ain’t out of the woods yet. They are, for the most part, still far too stuck in the past. The State Journal-Register, for instance, hired Ryan Keith away from the AP and gave him the task of handling the paper’s new media duties. Ryan initially did things like live-blog political events, debates, etc. He also created and staffed its aggregator page. But the paper has seemed to be returning to more traditional stuff in recent months. Ryan was reportedly frustrated with the mindset and announced today that he’s leaving the SJ-R for a career in public relations. From a press release…
Veteran statehouse reporter Ryan Keith is leaving as bureau chief for The State Journal-Register/GateHouse Media to join the public relations/public affairs firm of Mac Strategies Group, led by Ryan McLaughlin. Keith will head Springfield operations for the firm. This expansion will provide a day-to-day presence for the firm, strengthening its ability to service client both before the Chicago and Springfield press corps. Keith worked in the Springfield press room for 10 years, previously working for the Associated Press and starting as an intern with the Chicago Tribune in 2000.
I’m really sorry to see Ryan go. He was a huge asset to that paper, but he was woefully underutilized. Mac Strategies will be a good fit for him, though. Best wishes, man.
* As we’ve discussed before, newspapers make a nice chunk of change off publishing official legal notices. State law requires local and state government notices to be published in newspapers, and the papers charge for the privilege. So it’s no surprise that a bill that cleared the Senate this year which would allow fire protection districts to post a couple of types of notices on their own websites has the Illinois Press Association up in arms.
This proposal is the quintessential reason why government should not be allowed to report on itself and clearly demonstrates why government needs to remain transparent and not try to serve as both judge and jury in the business of public notices. Aside from the inherent conflict of interest, this legislation makes little sense for a state that is trying to rid itself of an image of pay-to-play politics, public corruption, unbridled graft and imprisoned governors.
Um, “report on itself”? If this was “reporting,” then why do newspapers want to be paid to run the notices?
The bill does have an obvious flaw…
For example, guess what was conveniently left out of the legislation? You guessed it, any frequency or time requirements that would mandate how long or how often government must post this vital information on their Web site. Under the proposed legislation, it could be 10 days, 10 hours, or even 10 minutes. It is alarming that however long the notice remains publicly available would be solely at the discretion of the public body posting its own notices.
Just because newspapers have been publishing notices since “before the days of Abraham Lincoln,” as the IPA exec director writes, that doesn’t mean we should be continuing to do it now. Instead of this flawed little bill, the GA ought to be thinking about setting up a central online clearinghouse for these notices which could be easily accessed and navigated by the public. Money could be saved and the public might be better served. It’s worth a debate, anyway.
* Meanwhile, there was a bit of a behind-the-scenes blowup yesterday over a claim by NBC 5 that they had the “exclusive” story about how the redacted material on a filing by Rod Blagojevich’s attorneys could be seen by simply copying and pasting the pdf file into a text file.
The station blasted out a mass e-mail late yesterday afternoon announcing their exclusive. But they made the mistake of not blind-copying the recipients. So, I hit the “reply to all” button and pointed out that I published the story hours before they did. They apologized profusely and corrected the story.
This is truly not a big deal, although I must admit that I did enjoy dinging the NBC guys a bit.
More importantly, though, I didn’t even realize that my own story actually appeared nine minutes after Natasha Korecki published the entire, unredacted document yesterday. Natasha should get credit for the scoop.
Things move fast in this business. When I was focused on writing my piece on the redaction problems, I didn’t even bother looking around to see if anyone else had it. I imagine that the same thing happened with others as well. Heck, I just realized that my Giannoulias story headline is almost identical to NBC5’s. I honestly don’t know if I saw their hed and it stuck in my mind, or if I came up with it on my own. Weird.
Also, I didn’t figure out this redaction thing on my own. CBS2’s Internet guru is the one who mentioned it to me. Information sometimes moves in unusual ways.
…Adding… I started to write this piece because the IlliniPundit blog has been shut down. And then I forgot to post the darned story. Sheesh.
Last night, I was appointed to the Champaign City Council, representing District 5. This is an enormous honor and an even larger responsibility. The time constraints of serving as a Council member (and running for election!) while balancing everything else in my life led to me to pledge during the application process that I would set aside IlliniPundit.com. I am doing so now, and I will no longer administer the site or participate on it. Reaching that decision was very difficult for me as IlliniPundit.com has been an overwhelmingly a positive experience for me, but I am confident that it is the correct decision. There just simply isn’t enough time to do both things well.
Gordy will continue blogging at his campaign website, which is here. I’m hearing that he’s accepting offers to buy the IlliniPundit blog. Good luck, Gordy, with everything you’re doing!
* Related…
* Former sports editor Bill Adee steers Chicago Tribune’s online strategy: Mr. Adee is working with the Tribune’s technology experts on new applications for the iPad, Kindle and other devices. The goal is to create newspaper downloads that readers will pay more for than they do currently.
* As you know by now, Sen. Bill Brady will release his tax returns today. But there are some conditions…
(R)eporters in Illinois will have only three hours to review the documents — and only if they’re at his Springfield campaign office. That’s the only way Brady has said he will make them available.
“We’ve made our decision,” Brady told reporters about the conditions for reviewing the tax returns. Asked whether he was doing enough to ensure adequate public scrutiny and transparency, he repeatedly replied, “You’ll have access to it.”
No copies. Just a lookie-look. And only in Springfield. Gov. Pat Quinn’s campaign responded…
“The lack of access to Sen. Brady’s tax returns does not meet Gov. Quinn’s standard for transparency and openess,” campaign spokeswoman Mica Matsoff wrote to the Current.
Quinn did the same thing last year, however. Reporters had to make a reservation to review the guv’s tax returns and couldn’t make copies. He did make copies available this year, however.
* The Question: Should Brady allow reporters to make copies of his tax returns? Explain fully, please.
* Greg Hinz has a must-read story which looks at how a bipartisan bill requiring means testing of seniors to qualify for free mass transit rides was killed in the Senate Executive Committee this week…
By a narrow 6-7 vote, the committee rejected the bill co-sponsored by Senate Transportation Committee Chairman Martin Sandoval, a Chicago Democrat, and Christine Radogno, the Senate GOP leader from La Grange. All seven votes came from Democrats.
And they did it even though the biggest Senate Democrat of them all, President John Cullerton, voted to move the bill to the Senate floor — and even though the Executive Committee traditionally does exactly what the Senate president wants it to do. […]
Mr. Cullerton’s spokeswoman says the president prides himself on not being a political boss but on allowing his members to vote their conscience. But that doesn’t explain why after Senate Executive Committee member Donald Harmon came down with food poisoning — he quite possibly would have voted for the bill —Mr. Cullerton replaced him on the committee with a definite “no” vote, Sen. Donne Trotter.
So Mr. Cullerton voted “yes” — reflecting the view of his district, his spokeswoman says. But he took an action to kill the bill upon which he voted “yes.”
Sen. Trotter is a regular replacement for members who can’t make Exec meetings, but Greg is certainly correct that Cullerton could’ve moved that bill to the floor if he wanted to. Instead, it was a nicely orchestrated bit of theater.
Is it any wonder the state can’t get a handle on its $13 billion deficit?
Our so-called statesmen in Springfield — led on this one by Sen. Rickey Hendon, a Chicago Democrat — can’t even deny a free bus ride to a senior who can comfortably do without it.
The true insult is to the many seniors who say they are willing to give up this little perk for the good of the greater cause — fixing the state’s budget mess. They know shameless pandering when they see it.
If this is the best Springfield can do, why drag out this legislative session another day?
They’ve failed to pay for state employees’ pension systems, which have become an unsustainable burden on the state. They’re months behind in making payments to hospitals, doctors and school districts.
Why not give free rides to seniors? In fact, why not give free rides to everyone?
Senior citizens I have encountered think the perk is madness. If a person can afford to pay his way, let him, they say.
I don’t know where the Tea Party folks are on this one.
And there were thousands of people rallying outside the state Capitol, begging for tax hikes to avoid cuts, when the Senate Democrats proudly protected free rides for seniors. If ever elected officials should have been run out of town on a rail, that was the moment.
* Speaking of this week’s rally, I’m not sure that Neil Steinberg fully understands who was at the event. He claims they were all “state workers.” Not true, unless you think teachers are state employees. Also, there were tons of employees of not-for-profit groups and companies at the event…
Still, I would have felt better had those been private-sector Illinoisans begging for more taxes. But that would be unlikely, given those most affected by government cuts — the poor, the sick, children — aren’t about to bus themselves to Springfield and wave signs.
There were plenty of poor people at that rally. All he had to do was read the coverage.
* The Responsible Budget Coalition has a new TV ad slamming “the politicians in Springfield” for wanting to “walk away” from the budget morass and adjourn early. “Don’t let them come home without a responsible budget,” the ad concludes. Watch it…
When I reached the Council of State Governments in Lexington, Ky., executive director David Adkins told me, “I’d never heard the term until your phone call today.”
Adkins is important because he was a Republican state legislator in Kansas from 1993 until 2005, and those who are now calling for a forensic audit of Illinois government frequently claim that a forensic audit in the Jayhawk State in 2003 saved taxpayers $1 billion.
It’s true, said Adkins, that then-Democratic Gov. Kathleen Sebelius instituted an aggressive review of state spending practices early in her first term. “But most of the savings came from picking low-hanging fruit,” he said, such as selling off state vehicles.
And he quoted Auditor General Bill Holland saying the audit wouldn’t save money…
“These resolutions would require my office to re-examine 135 million transactions and check all the details on about 50,000 contracts a year going back nine years,” said Illinois Auditor General William Holland. “It would be a mind-boggling, astronomical cost. We’re talking hundreds of millions of dollars.”
Holland, whose office is nonpartisan, was once chief of staff to former Democratic Senate President Phil Rock. And though Holland formally takes no position on any bill, he said it’s “very doubtful” that such an undertaking would pay for itself.
Andrzejewski vehemently disagrees and Zorn lays out his entire reasoning, so go check it out.
“The governor came out and wants to convince people that he heard the people of this state when they said they want government to rein in spending. He is trying to convince people he’s going to cut $2.6 billion, when it’s clear that at best, he’s got $200 million up there in unspecified cuts [if his proposed 1 percentage point tax increase passes], and this is from a guy who’s got a track record of claiming he is going to cut and not having the guts to go ahead and do it,” he said.
However, Kelly Kraft, spokeswoman for Quinn’s Office of Management and Budget, said if the governor’s proposed income tax increase passes, there would still be $900 million in cuts. She added that Quinn is seeking to make $400 million more in reductions, in addition to the cuts he proposed in March.
Since it’s highly doubtful that the approximately $3 billion income tax hike will pass, this is mostly an empty argument.
* Related…
* Rep. Jack Franks: Want to solve the budget crisis? Say no to spending
* The FDIC’s deadline for Broadway Bank to find $85 million in new capitalization expires today, so Alexi Giannoulias’ family bank could get “eated” later this afternoon…
If a bidder has not been found for the Giannoulias family’s Broadway Bank, today could be the day federal and state regulators walk in and shut it down.
Nearly 90 days ago, the bank entered into a consent decree with government officials in which bank officials agreed to try to raise $85 million to recapitalize the bank. […]
It could be the FDIC found another bank willing to buy Broadway Bank. Broadway Bank officials won’t know until the regulators arrive.
Or regulators could wait another week past Monday’s 90-day deadline.
* If the seizure does happen today, you can expect a gigantified firestorm as hostile reporters and pundits try to force US Senate candidate Giannoulias off the statewide ticket. Politico set the tone with a story about how the White House refused to commit to getting the president involved in the campaign…
At the moment, the White House seems open to the idea of losing Obama’s old seat rather than putting the president’s prestige on the line for Giannoulias, the brash and boyish Illinois state treasurer — and onetime Obama basketball buddy — whose campaign has been rocked by the financial meltdown of his family’s bank.
Durbin said Emanuel was sympathetic to his pleas but ultimately noncommittal, telling him that the White House was “considering the race, weighing their options and weighing a decision on what to do.”
Politico reports that Giannoulias wasn’t even told that President Obama could be visiting Quincy soon, although the publication noted that other congressional candidates are grumbling about the same lack of communication from the White House. The publication also claims that it’s an “open secret” that the White House is watching to see if a bank failure forces Giannoulias out of the race before deciding what to do.
Sen. Dick Durbin was the focus of the article, and he was clearly trying to call out Obama for his inaction. But Durbin, who is Giannoulias’ campaign chairman, wasn’t exactly a 100 percenter today either…
To an extent, Durbin’s political stock is tied to Giannoulias’s, Democratic insiders say. As chairman of the campaign, Durbin could take some blame for a Giannoulias loss — just as he gears up for a possible majority leader’s race against New York Sen. Chuck Schumer this fall, and just as Schumer could get credit for helping guide New York Democratic Sen. Kirsten Gillibrand’s path to a likely victory.
But Durbin dismissed such talk, saying he expects Reid to win his reelection in Nevada and continue as majority leader. And he distanced himself from the problems of the candidate.
“There’s certain things I can control, certain things I can’t control,” Durbin said. “I’m not the candidate; someone else is. I can give advice and try to analyze this as best I can. Ultimately, Alexi has to make these decisions personally.”
That sound you just heard was the thump of Durbin throwing his little buddy under the bus.
The Giannoulias people say that this isn’t the first time he’s been under pressure to drop out of a campaign. When he first ran for state treasurer four years ago, Speaker Madigan tried to force him out so that his own candidate could win unopposed. After Giannoulias won the primary, reporters and pundits took notice that Madigan still seemed rather hostile to Giannoulias (because of allegations about the bank) and was distancing the state party from him. Then, last year when the White House was openly courting Lisa Madigan and others to run, Giannoulias was pressured in the media to drop off the ticket.
Through it all, he has perservered, and the candidate believes that come election day six months from now the bank failure will be old news and not a big deal.
The problem with that theory is that the state’s political reporters and pundits are infinitely more hostile to Giannoulias than anybody currently running for office here. They don’t show any signs of letting up, either. And the fire-roasting they are preparing for Giannoulias today will be a sight to behold…
Giannoulias’ campaign won’t talk specifically about the strategy for dealing with a bank failure. Spokeswoman Kathleen Strand said he will focus on the economy and creating jobs, arguing that the bank’s problems are not major issue for some people.
“We are going to keep talking to voters about what matters to them most,” she said.
Changing the subject won’t be easy.
“You can’t overcome that … especially Giannoulias, who four years ago ran for treasurer touting his experience and expertise. I mean, you can’t have it both ways,” said David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University in Carbondale. “This is going to be an indelible stain on him.”
Over the past few years, we made decisions that — though sound at the time — resulted in a high level of nonperforming assets. We have paid a significant price for those decisions, but we can survive and, given time, thrive. To do this, we do not need assistance from taxpayers; all we need is patience from regulators. Where big banks got a bailout, all we ask is to be allowed to live, with the capital we have, until the market turns around — as it already has for the big banks.
There is little risk to such an approach and much to gain. Current regulators are relying on an outdated belief that a bank in trouble on some capital ratios should be shut down quickly as the most cost-effective solution. But most of today’s troubled institutions have low levels of capital because they are forced to value assets in the worst possible light at the worst possible time, and to realize these losses immediately. Given the global conditions, it is difficult to see how closing banks early is a lower-cost option. Why force a sale when the market is at the bottom? […]
We are not asking for a bailout, just time to turn things around. Our bank, our customers and our communities are all experiencing a great economic dislocation. Wall Street banks got taxpayer money to survive — all we seek is a chance to pull ourselves up.
We may not be too big to fail, but we shouldn’t be deemed too small to live.
The bank is currently turning a profit, so his ideas do make some sense. Lots of small banks are being gobbled up by the very same “too big to fail” institutions that got hundreds of billions in government bailouts - making them even bigger at a fraction of market rates because these post-seizure fire sales are quite yummy for them. But it’s highly doubtful that he has swayed the FDIC at all.
