I have three important points to get across in this column:
- Our banks are safe!
- Our banks are safe!
- Our banks are safe!
The echo-chamber corporate media is a dangerous weapon. They can easily take the mistakes of one poorly run California bank that you'd never heard of before and turn it into a faux crisis.
I have a suggestion for these reporters who dig yelling "Fire!" in a crowded theater. Rather than follow the pack and report the same thing everyone else does, try a unique angle. Why don't you compare North Dakota banks to Silicon Valley Bank or some other such national or regional bank? The difference is stark.
To be clear, all banks have faced challenging times thanks to the Biden administration. The big spending and money-printing policies have brought historic inflation. Over the last year, inflation has spiked to 40-year highs. That caused the Federal Reserve to hike interest rates eight times in the last year. That means less borrowing and fewer profits for banks. But our community banks anticipate every scenario and plan for it.
Anne Balcer, senior executive vice president, chief of government relations and public policy for the Independent Community Bankers of America, told me: "One of the things we saw before Silicon Valley Bank collapsed was the investors in the bank were pulling their own equity. They were selling their own stock in the bank. And they themselves, the insiders, were the ones running first."
"What we see with our community banks is the opposite. Usually, insiders are putting money in when they anticipate challenging financial times. Every economist I've talked to since last September has said we're on the verge of a recession. So what our community banks have done is taken steps to be particularly conservative, ensuring that they are in a safe and sound position. And really that is to make sure there is no disruption in services that they can provide to their community members. One of many differences is how they create balance sheets that will withstand these changing economic times. They have been around for hundreds of years and fully intend to remain in place for the next hundred or so to come."
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I also asked television star and entrepreneur Kevin O'Leary of "Shark Tank" fame about one of our most famous banking assets during his recent visit to North Dakota: "This is the only state in the union with its own effective sovereign wealth bank, banking is under scrutiny. Now, regional banks all over the place are going under, but not here. I mean, you guys started your own bank in 1919, and you've had virtually no failures because it's well-run."
Asked to compare our banks to what happened with Silicon Valley Bank, he said: "In a nutshell, it's a bank run by idiots. It's that simple. Those are tough words, but it's true. These guys ran the bank like a hedge fund. Everybody should come to North Dakota. You do it right!"
If you have any doubt about the strength of our banks, ask your banker. They'd love to explain how they do it differently here in North Dakota.
Scott Hennen hosts the statewide radio program “What’s On Your Mind?” On AM 1100 “The Flag”, AM 1090 KTGO “The Flag” and AM 1460 KLTC. Email him at ScottH@FlagFamily.com
This column does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.
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