A Love Affair with the FDIC Press Release
At first I was taunted with the January 25th release regarding the assumption of the deposits of Douglas National Bank, and I went for the bait. From that moment on, every month I was taunted with a bank closing or acquisition, and it became something I started to look for, to expect. Things started to butterfly quickly once spring arrived, and looking back, it was probably about the time FDIC Chairman Sheila Blair issued a statement on IndyMac that I truly fell under the FDIC press release spell.
In the press release, Blair reveals that "IndyMac's conversion has been largely a non-event" for insured depositors. Whew! I felt a definitive wave of comfort after reading through this knowing that yes, the FDIC is confident in how they are managing what was, at the time, the largest financial crisis we'd seen.
...I am a typical account-holder and I still have confidence in the community banking system, and I surely couldn't believe that the FDIC would need a bailout...could I?
But it got better...by the end of July I was literally waiting for the FDIC to issue a press release with the next bank closing, the next conservatorship, the next acquisition...the next huge banking story. And the FDIC did not disappoint.
Rapidly Friday evening bank closings became
boring the norm. I needed more. One Friday I was taunted when I thought I had made it through a week without news of a financial institution closing or merging when - surprise! - a press release came through around 8:15pm about Citizens Bank and Trust acquiring the deposits of the Columbian Bank and Trust Company. I got my fix. And literally from that Friday on (August 22) there has been news of a bank closing or acquisition, every Friday...until this week.
Not only did I receive a press release from the FDIC about an acquisition on a Thursday (JPMorgan Chase/Washington Mutual), but it included a very specific sub-headline - something I had never seen in any such FDIC press release before. It read "FDIC Facilitates Transaction that Protects All Depositors and Comes at No Cost to the Deposit Insurance Fund". After reading that I couldn't help but blush...let me explain.
On Thursday morning, September 25, 2008, the same day in which the FDIC would later issue the press release regarding JPMorgan Chase and Washington Mutual, Bloomberg released an article explaining that the FDIC may need $150B bailout because they were at risk of not being able to insure the numerous banks that could be closing, etc. due to current economic conditions. Hearing from many community banks pretty regularly at BankInfoSecurity.com, I couldn't help be at least somewhat skeptical of the article. Outside of my job I am a typical account-holder and I still have confidence in the community banking system, and I surely couldn't believe that the FDIC would need a bailout...could I?
Of course not! And the FDIC let me know via a press release. Later on Thursday afternoon I received a press release from Andrew Gray, the Director of the Office of Public Affairs from the FDIC, who wrote an open letter to the Bloomberg News regarding their article. In it, Gray says that the FDIC, the banks it oversees, and I think in general the entire community banking system and all the people that make it up, can feel confident that yes, everything is ok. The general community banking public can take a breath and relax for just a moment knowing that the FDIC is not in any need of a bailout. Touche Bloomberg News!
And so you can see now why, after seeing the sub-headline in the FDIC press release issued later Thursday night, after all the drama unfolded, that I would feel so charmed. Many people probably would not even have noticed the sub-headline however myself, and others under the spell of the FDIC press release, know that while it may be seen as a message of confidence to the banking community, it was also a subtle knock at Bloomberg News. FDIC press release, you surely are genius.
So where do I go from here? I am honestly sitting on the edge of my laptop. Friday evening bank closings have lost their luster, and I've already seen the night-time releases. I got the surprise I'd been yearning for this past Thursday, and the back-and-forth between Bloomberg News and the FDIC literally put me over the top. At this point I'm spent, but still looking for more.
And so the dance continues, the FDIC press release and my lust for some of the most important banking news I will ever hear in my lifetime.