The Federal Reserve has made its stress tests more lenient by eliminating the possibility that banks could fail for subjective reasons.
The Wall Street Journal
I’m sitting in The Vault, an old bank branch in Boston that’s been converted into a bar. It’s a dimly-lit, oak-paneled place, off the beaten track, the kind of watering hole where you meet someone if you want privacy. It’s a dark place for shady people, to turn Somerset Maugham’s crack about the French Riviera on its head.
I’m nursing an extra-light beer, kidding myself that it makes a difference, waiting for a stressed-out old friend to arrive. She’s been through a rough time recently; once a leading candidate for someone to take to the altar, she’s now a bit past her prime, and is being passed over by suitors who just a few years ago would have eyed her up and down like an investment-grade balance sheet. At one time she was built, as one might say, like a safe deposit vault, but that brick-and-mortar style has gone out of fashion.
I look up towards the entrance onto Liberty Square, a public space so obscure they had to strain to find a statue to adorn it; the chosen piece of public art is a memorial to the Hungarian Freedom Fighters, martyrs whose constituency is much smaller than those who visit the Irish Famine Memorial a few blocks away, or the Saint-Gaudens tribute to the 54th Massachusetts Regiment, the black soldiers recalled in Robert Lowell’s poem “For the Union Dead” and the movie “Glory,” up on Beacon Hill. If you want to eat Hungarian when you come to Boston, we got no goulash for you.
I check my watch; it’s 7:00. In my TV-addled youth I would have been wide awake at this hour, my bedtime a half hour away, right after “Rin Tin Tin,” and I would whine like a panhandler at South Station to stay up later. As I approach my seventh decade, going to bed at 7:30 after a long day at work is beginning to appeal to me.
I look up at the door and there she is. Not as trim as she used to be, but with a certain ineffaceable charm. She meant a lot to me in my youth, when she opened up the first “NOW”–negotiable order of withdrawal accounts–down the street from where I lived in Watertown, Mass. It meant I got a few pennies in interest on my checking account balance every month which, with my deposit bottles, meant I could afford imported beer every now and then.
“Yoo-hoo! Francine!” I call out to her, and she blows past the hostess like the 20′ Soling sail boat that I nearly crashed into a dock a few blocks away on blustery spring day when I misjudged the wind.
“How are you darling,” she says as we exchange party-kisses.
“Fine–it’s been a long time, hasn’t it?”
“Yes it has.”
That’s the way we talk when we’re together; formal, a bit stiff, but it helps us maintain distance–and perspective. She is, after all, a insured depository institution, regulated at both the state and federal level. It wouldn’t do for her to come on like The Money Store, or Quicken Loans.
“What’ll you have?” I ask, but I know what the answer will be; a Kir Royal, champagne and crème de cassis. I never figured out the attraction, but as she explained it to me once, it’s a hell of a lot classier than light beer.
“So–how have you been?” I ask once she has her cocktail.
“I hate my life,” she replies, taking off–in the enduring image of P.G. Wodehouse–like a scalded cat.
“It can’t be that bad,” I reply.
“Oh yes it can. Every time someone gets interested in me, he dumps me and never tells me why.”
“Isn’t that . . . better?” I ask, trying to look on the bright side.
“No,” she says. “I’d much rather have them give it to me straight. A simple statement: ‘Your liabilities exceed your assets.’ I can handle it.”
“So–it’s all too subjective?”
“Right. The old ‘It’s not you, it’s me’ line.”
“Like George Costanza, huh.”
“You got it.” She looked down into her drink, and I could detect a tear forming in her eye. “You have no idea how it stresses me out!”
I start to put my arm around her, but I stopped. I’m a married man–better go for the hand pat instead.
“There, there,” I say.
“That’s just an expression.”
“Well, it’s a stupid one.” I let her stew for a few seconds, then try again.
“You know, the rules of the game have changed.”
“Since just the other day. The Fed decided that they’re going to drop the subjective tests.”
“Really?” Her eyes grew as big as the George Washington quarters that used to be part of her logo.
“Really. From now on, no more of this ‘Not a good fit’ or ‘We don’t share the same vision’ or ‘We don’t think a merger is in our best interests.’ Anybody who wants to give you a failing grade has to have a pretty darn good reason for it.”
She reached in her purse and took out a tissue to dab at her eyes. “That’s great. That is really great,” she said. She can be a pretty tough old gal, but she’s no ingrate. “That is going to take so much stress out of my life!”
We both exhaled, and Anita Baker came on the speakers overhead. “God that takes me back,” she said. “Remember back in the 80s when you used to sing her songs as you stood in line to deposit your paycheck at the branch on Charles Street?”
“Sure do. Beautiful stuff.”
“Not when you sing them.”
“The other customers didn’t like it?”
“I didn’t talk to all of them,” she said with a diplomatic hesitation, “but we had a run on deposits that looked like a newsreel of the Great Depression.”