Modern Middle Manager
Primarily my musings on the practical application of technology and management principles at a financial services company.
Asshat Management From Above

Tuesday, November 25, 2003  

Proving once again that no one at our parent corporation knows what the hell we do, we are unable to add more capital to our banking department so it can grow.

Short primer -- banks need so many dollars in capital per dollars in deposits so that its guiding regulatory body (in our case, the Office of Thrift Supervision) believes it's a real company instead of a shell siphoning off poor unsuspecting customer cash into a Swiss bank account.

We are currently near the limit of our ability to take in new deposits unless we get a capital infusion. We asked our parent company for several million dollars so we could resume our rapid growth. We projected a 25% return on investment in the first year. I'd say that's pretty good. Our parent company decided that, although flush with cash, it wasn't an option -- they wanted to give us a building. I'm not sure if anybody reading this blog remembers the S&L crisis of the late 80's/early 90's, but the Feds have a really, really dim view of capitalizing a thrift with real estate. Does the name Charles Keating ring a bell? No, apparently not for our parent corp.

I remember driving through Yosemite on the 120 with my girlfriend earlier this year. Though near-enraptured by the beauty around us, sunlight dancing through the trees and crisp, clean air tickling my lungs, I was present enough to avoid the sprinting squirrel that apparently decided to answer empirically the age-old question regarding animals crossing the road. The "why?" was never answered, though, as he ran headlong into a Ford Explorer's front tire, bounced up in the air about four feet and landed quite still in the middle of the road. That is exactly what just happened to our business plan.

I'm not sure what next year is going to look like now. Our banking growth was predicated on the capital infusion and interest rate creep will damage our wire services income. Our wealth management business remains stagnant and barely profitable. Buzzword Bob has done nothing to turn this around. I suspect budget cuts are coming. Stay tuned.

posted by Henry Jenkins | 11/25/2003 01:21:00 PM

Comments: Post a Comment
the author
open source