Magazine article Phi Kappa Phi Forum

A Bitter Taste in a Banker's Mouth

Magazine article Phi Kappa Phi Forum

A Bitter Taste in a Banker's Mouth

Article excerpt

The dishonor that hovers over the U.S. banking industry from the 2008 financial crisis remains difficult for professionals like me to swallow. I still have trouble digesting a seemingly friendly exchange I had some months ago with an elderly couple about the fallout. The husband, wife in tow, approached me while I was eating a weekday lunch at a sandwich shop in my hometown of Augusta, Ga., to settle a debate: Was I a preacher or a banker?

My conservative navy pinstripe suit, I surmise, prompted their assumptions. The husband felt certain I was a banker, one who had once worked for Wachovia. The wife stepped forward to counter, "I thought you looked too nice to be a banker.''

I responded courteously, as etiquette ranks high in my field, that he was right on both counts.

"You see there, honey," the husband declared, "I told you he was one of those bankers."

I smiled tightly. Then 1 thanked the wife for the (backhanded) compliment. Why, I asked, did she think I resembled a preacher? "Because," she asserted, "you look too honest to be a banker."

I chuckled as much as I could and reassured her that I had been an honest banker in Augusta for 28 years. The perception of bankers changed after the scandal, I observed. They agreed. We parted kindly but I lost my appetite.

I don't mean to brag, but my reputation precedes me as a business leader. I never imagined that my honor and integrity would be questioned because of my occupation!

Every bank I have worked for enforces a strict code of ethics: First Atlanta Bank, Wachovia and Bank of America, and community-based First Citizens Bank and Savannah River Banking Co. So do all other banks in the U.S. And three years before the 2008 financial crisis, the Federal Deposit Insurance Corporation, in "Corporate Codes of Conduct: Guidance on Implementing an Effective Ethics Program," reminded bank officials of the importance of complying with applicable laws and insisting on scrupulous morality. Banks strive to be beyond reproach.

True, a few institutions ignored regulations and broke laws around the financial crisis and the resulting Great Recession. For instance, the FDIC's lawsuit against Kerry K. Killinger, longtime CEO of Washington Mutual, which in September 2008 became the largest bank failure in U.S. history at $307 billion in assets, contended that he and lieutenants went on a "lending spree" in what they knew was a housing market bubble and "focused on short-term gains to increase their own compensation, with reckless disregard for WaMu's long-term safety and soundness." WaMu's assets were sold to JPMorgan Chase for $1.9 billion, 9,200 jobs were cut, and 56,000 shareholders were left with nothing. And Richard S. Fuld, CEO of Lehman Brothers from 1994 to its $619 billion bankruptcy and collapse in September 2008, also heedlessly guided the investment firm into the rapidly expanding real estate bubble. Portfolio magazine put The Gorilla, as Fuld was nicknamed for his competitiveness, at the top of its 2009 list of worst CEOs of all time, describing him as "belligerent and unrepentant" about the loss of 25.000 jobs and tens of billions of dollars to shareholders and creditors. Portfolio noted that unlike Fuld, even Bernie Madoff, the infamous investment manager arrested in December 2008 for running a $65 billion Ponzi scheme on 16. …

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