Probably aiming at hundreds of thousands now unemployed real estate agents the Fed has
launched a website to help new bank directors learn how they can work to ensure the safety and soundness of their institutions. The website, BankDirectorsDesktop.org, also provides a refresher course for experienced board members.one learns from a Fed release from Monday.
Surfing to the site fears of a folly of the more serious size become reality.
After a few lines of introduction future superstars of the banking industry start out with the basics:
What is a bank?
If you now thought some answer like,
"banks are the financial intermediary ion the economy, providing liquidity to government, business and consumer"would elevate you a step on the way to your tailor-made boardroom pin-striped suit, you may have to compete with answers that contain stones and vaults. Here's the Fed's 101 definition what may be seen as a bank:
The word “bank” evokes different mental pictures for different individuals. Some will think of the quintessential bank building with big stone columns and a large vault. Others will envision a balance sheet showing a bank’s assets, liabilities, and capital. Still others will fall back on the regulatory definition of a bank: generally, an organization that is chartered by either a state or the federal government for the purpose of accepting deposits.Hey, wasn't that easy? Stay on your floating chair in the pool (just keep your iPad dry) as the Fed promises that
When you finish this section of the course, you should be able to:What's even better, once you are a director you don't have to work Mon-Fri, the Fed lures millions of potential bank directors with a 'don't worry, be happy' approach:
- define a bank and
- describe the role of a bank director.
As a director, you won’t be involved in the day-to-day management of the bank, but you will be involved in the strategic plan the board adopts for the bank. Your involvement also comes from:Light your fat Cohiba now as the Fed assures you you are THE boss:
- participating in the board of directors meetings,
- reading the various reports reviewed at the meetings,
- supervising bank management and
- knowing the bank’s financial condition.
One word of caution before we move on. Directors are typically asked to serve on a board by the bank’s chief executive officer (CEO). That often engenders some allegiance to that CEO; however, it is important to remember that management works for the board of directors, not the other way around. It is equally important for both the board and management to understand this concept.Skipping sections on regulatory issues - did anybody care in the last 10 years? - I am not gonna get bothered by a chapter on Bank Safety and Soundness either. Or did anybody at the Fed in this millennium?
Once you chew your Cohiba dressed in pin stripes with an "interesting" tie you need not worry about things going wrong. Finish the Fed's course and follow their advice:
Regulators share a common goal with bank directors and management. Regulators want a bank to be run safely and in full compliance with laws and regulations. When these goals are not met, regulators have a wide range of informal and formal supervisory actions they can use to correct deficiencies and problems. Additionally, regulators can assess civil money penalties for violations of the terms of a formal supervisory action. In the event of noncompliance with a supervisory action, a bank or individual risks the possibility of more severe supervisory sanctions.If this last chapter on solving a bank crisis was a bit too difficult, here's a plain English translation: If things go wrong, collect your bonus and retire in Cancun.
Can somebody pls wake me up and say this is not for real!!!