Academic journal article ABA Banking Journal

The Ultimate Capital: Accurate Information

Academic journal article ABA Banking Journal

The Ultimate Capital: Accurate Information

Article excerpt

In the battle for meaningful legislative reform, information is bankers' weapon of choice.

ABA has put many informational resources to work to educate the industry, Congress, and the public. But more will be needed to counter inaccuracies and even misinformation.

Horror stories. As proof, take some examples from the media:

* A front-page New York Times story reported in January that the takeover of Bank of New England would likely "cost taxpayers at least $2.3 billion." Said the Times correction the next day: "The Federal Deposit Insurance Corporation's bank insurance fund, which is financed by banks themselves, will be responsible for the cost; it will not be covered by taxpayer funds."

* The Reuters wire service attributed a rather gloomy outlook on banks and thrifts to FDIC Chairman L. William Seidman. U.S.A. Today picked up the Reuters story.

Problem was, Seidman never said any of it. Reuters had mixed up quotes by Seidman and House Banking Committee Chairman Henry B. Gonzalez when Summarizing articles from Time magazine.

* Cable News Network inadvertently linked a healthy Rhode Island mutual savings bank to the collapse of the state's credit union deposit insurance system. By the time CNN aired its apology, some $20 million in deposits had been pulled out.

Mistakes happen. But media errors can be particularly costly to financial institutions.

Forging the weapon. All of this is why for the past six months, ABA has been focusing on putting the information weapon in the hands of those best able to use it--bankers.

ABA's February Banking Leadership Conference is a case in point. It provided an opportunity to sort out the issues facing banks, to develop a realistic agenda for the balance of 1991, and to communicate this agenda to the industry. …

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