April 14, 2009

And now for something completely different: some good news about banking.Yes, I know that an upcoming analysis by the IMF reportedly says that when all is said and done toxic debts on the balance sheets of banks and insurers could go as high as $4 trillion. And I realize that this weekend saw the FDIC take over two more banks -- the 22nd and 23rd takeovers of the year.But it's not all doom and gloom. While I couldn't disagree more with Time, which this week declared that "the great banking crisis of 2008 is over," there are actually many things going right in the banking industry.

Before I lay them out, though, it's important that we clarify our terminology. When it comes to the current crisis, all banks are definitely not created equal -- or equally culpable. As Edward Yingling, president and CEO of the American Bankers Association, pointed out in a letter he sent to President Obama in February: "Wall Street and Main Street banking are very different."According to Yingling, "of the over 8,000 banks in this country, very few ever made a single subprime loan, and they did not engage in the highly leveraged activities that brought down Wall Street firms."