Academic journal article ABA Banking Journal

Thrifts May Quack, but They Still Aren't Banks

Academic journal article ABA Banking Journal

Thrifts May Quack, but They Still Aren't Banks

Article excerpt

Someday, scientists theorize, the planets, stars, and other celestial bodies will cease their outward expansion from the fabled Big Bang. Slowly, these bodies will reverse direction, pick up speed, and rush back to meet one another at the center of the universe in what H.G. Wells might have called a fiery cataclysm beyond imagining.

Just before Big Bang 11, no doubt, some U.S. politicians will still be debating who caused the S&L mess. Truth in politicking? As the 1990 election campaign heats up, S&Ls are again in the political spotlight. This proves that even complex financial issues are fodder for popular debate. Unfortunately such discussions often lack accuracy

In the rush to simplify the language of the S&L bailout for the average voter, politicians tend to use terms like "banking" and "bankers" instead of "savings and loans" and "thrift executives."

The distortions don't help the banking industry, and come at a time when clear, precise language is badly needed. Bank health in general and the soundness of FDIC's Bank Insurance Fund specifically have been subjects for debate in the popular press. In almost every case, the attacks are overdrawn, but they're getting good coverage.

Political leaders of both parties, news reporters, and editors must be made aware that careless remarks can potentially contribute to the public's confusion. Worse, as ABA's executive vice-president, Donald G. Ogilvie, said recently: "Some reporters do not themselves understand the differences between banks and S&Ls-so complete accuracy may never be attainable."

Speak up now. Bankers and their allies can help set the record straight, as Harold A. Stones did in July Stones is executive vice-president of the Kansas Bankers Association. He wrote to Ronald Brown, chairman of the National Democratic Committee, about Brown's remarks in a speech in Oregon.

Brown had used the term "bankers" when referring to those who were responsible for the S&L mess. Stones took exception.

"To call S&L people bankers' is like referring to Democrats as Republicans," he wrote. …

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