Magazine article American Banker

Ex-FDIC Chairman's 'Survivor' Rules

Magazine article American Banker

Ex-FDIC Chairman's 'Survivor' Rules

Article excerpt

A former Federal Deposit Insurance Corp. chairman told New England community bankers that they have to stress selling, spend on technology, offer investment products, and grow through acquisition or they won't be around for very long.

"The first thing is, you have to be a sales organization. Nothing is going to come to you anymore," L. William Seidman told 150 executives from the Maine, New Hampshire, and Vermont bankers associations gathered here last week for their annual tri-state conference. "The new way will be reaching, scrambling, grabbing to get deposits. And any bank that doesn't put sales at the top of its strategic list -- in the broad sense of sales -- I think will not be a survivor."

Mr. Seidman, who was chairman of the FDIC from 1985 to 1991 and is the chief commentator at CNBC TV, said banks should sell all types of investment products, and that money management is "clearly being recognized as one of the best businesses."

People have more and more incentives to save for retirement, including the likelihood that Social Security will be privatized to some extent, and this means more opportunity for banks to collect money management fees, Mr. Seidman said.

He said banks should put money into risk management systems and other technology and do more to attract and keep good employees. He also said they have to buy other banks if they are to stay in business, "unless they are in very small areas so far from anybody else and operate in isolation -- and in today's world, that's not very possible. …

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