Happy to be dull

The Indiana Bankers Association met in Indianapolis recently and offered The New York Times a glimpse of a world it and the people who read it may have forgotten:

Though they greatly outnumber the national and regional banks, community banks have barely registered in any of the fallout from the credit crisis, in part because they hold less than 10 percent of the $13.8 trillion in bank assets nationwide.

The 50 or so bank failures have been largely clustered in a few states, like Florida, Arizona and California, where the bursting housing bubble had the greatest impact.

In states like Indiana, where property values never soared, community banks have been rock solid. The last failure in the state was in 1992.

To spend time with these Indiana community bankers is to step into an alternate universe, where everything sounds a little strange because it makes perfect sense. You hear things like, “If you don't understand the risk you're taking, don't take it.” And, “We want to be around for decades, so we're not focused on the next quarter.”

Forget “too big to fail.” These banks consider themselves too small to risk embarrassment. They are run by people who grew up in the towns where they work, and their main fear is getting into a financial jam that will shame them in the eyes of their neighbors.

The steep profits earned by national banks didn't turn their heads in the last decade because they were inherently skeptical of double-digit growth rates.

Interesting, isn't it, that the "alternate universe" is the one that makes sense because people keep doing the same old things, like being careful about risk and skeptical of enormous profits, in the same old way because they have worked. It ain't Bedford Falls, but it sometimes looks that way because of the Pottersville the big boys have created.