Opinion: Wall Street vs. Main Street Missouri's banks: Safe, sound and serving

Headlines can be misleading, and news commentators continue to confuse, so let's set the record straight.

The banking industry - traditional, federally insured, main street community banks, including your local commercial bank, thrift or savings bank - is safe and sound. And your account in commercial banks, thrifts and savings banks carries Federal Deposit Insurance Corp. insurance. That means your account in a federally insured bank is protected up to $100,000, with additional protection for joint accounts, and $250,000 for a retirement account.

The FDIC guarantees your accounts with more than $52 billion in assets to protect depositors like you. Not a single penny of FDIC-insured deposits has ever been lost!

In addition, the banking industry's capital is at historic highs. As of June, the industry held $1.4 trillion in capital, plus $144 billion in reserve as a rainy day fund against possible losses.

The challenge we face is this: Words matter. When one word is used to mean several different things, it inevitably creates confusion. We know what a bank is - or at least we think we do. The media continues to confuse Wall Street investment banks with main street community banks. Bear Stearns, for example, was an investment bank, not a federally insured community bank.

The word bank is sometimes applied to a mortgage firm, the function, purpose and regulation of which differs from FDIC-insured depository institutions.

Yes, there are challenges in today's market economy. Banks play an important role in our local communities and in our nation's economy. They are the source of stability and of growth. That is true regardless of their asset size, charter or business plan. And the vast majority of banks today hold more capital than the law requires.

The community banks of Missouri are safe and sound.

We all know that our financial system is being tested. But let us also remember that the system is showing its resiliency.

Assets in Missouri state-chartered banks totaled $70.4 billion on March 31, an increase of 6.9 percent from a year earlier. Deposits were at $56.8 billion, up 5.7 percent.

Our banking system is strong. This crisis will pass, as have all the others, and the result will be a stronger financial system with fewer unregulated players.

Diane Casey-Landry is chief operating officer and senior executive vice president of Washington, D.C.-based American Bankers Association. She can be reached via www.aba.com.

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