It's 6 minutes after 11. Today's programming is made possible in part by The Advocates of Minnesota Public Radio contributors include the McKnight Foundation working to strengthen families and communities Ecolab A supplier of cleaning and sanitizing products and services and Kare 11 news the news Handle With Care. Hey, good morning. Welcome to midday on Minnesota Public Radio. I'm. Finelli in this week for Gary eichten. Thanks for joining this big news today minneapolis-based Norwest Corporation and Wells Fargo & Company headquartered in San Francisco have announced plans to merge the terms involving this latest in a string of Blockbuster banking mergers R34 billion dollar stock swap Wells Fargo shareholders would get 10 shares of Northwest common stock in exchange for each share of Wells Fargo common stock here are a few more details. The new company would retain the Wells Fargo name and be based in California. Minneapolis would be the headquarters for the combined Midwest banking business Paul Hazen the chairman and chief executive officer of Wells Fargo will become chairman of the combined companies Richard kovacevich chairman and CEO of Northwest will become president and chief executive officer the deal still require. Shareholder and Regulatory approval. This is the second Bank merger with in the past year to have a big impact of minnesotans. Minneapolis-based First Bank bought out us Bancorp, which emerged reverse rather as a new name of the company. There are still a lot of unanswered questions as a result of the proposed merger among them. What is this mean for Northwest customers and how their banking is affected what happened to employment levels in Northwest and ultimately the long-term future of a homegrown Bank. It will likely be a while before I get the answers to those questions, but the sheer number recent banking mergers is a good reason to explore the current state of banking in Minnesota and across the country. And what's in store for banking concerns were going to be joined in just a few minutes by NPR senior business and economics editor Chris Farrell, you'll be here to take any questions or comments. You may have about the wave of banking mergers. You think they were a good idea. What concerns do you have and how have they help or hurt your experience with Bang? The numbers to keep in mind I'll give these numbers in a bit to 276 thousand the Twin Cities to 276 thousand outside the metro area. The toll free number is 1 800-242-2828 1 800-242-2828 before we get to a Chris and your calls though. I would like to hear some reaction to today's announcement from Minnesota 4th District Congressman Bruce vento. Who is the ranking Democrat on the house financial institutions and Consumer Credit subcommittee. He talked with Minnesota public radio's Bill Catlin earlier today about this proposed merger. Get out of work at garbage Lee concerned about what the effect is on the competition what the effect is on the free market and the marketplace and how it works. I mean, obviously the the the the national and state laws of established Bank to in fact that provide credit. Help our economy. And of course the other types of consumer services would seem to and what's to be the fees and other aspects of tend to get a little more they get a little more attention, but they grabbing powers and associated with the financing of our home purchases of our business establishments that really are the heart and soul of what the banking is about for our farms and and manufacturers in the service Industries across our our nation the concentration of The Twelve or thirteen thousand bankstown 292. That really doesn't explain the story. When you start looking at the the concentration of assets. I wrote to the law that affects the interstate Banking and ranching and which is you know, facilitated some expend some of these these murders which are going on in any case Places that time we wrote it to the largest bank had a couple percent of the assets it was Citibank today. The nation's be of a merger will have over 8% in the law limits at 2:10. So I mean you can see how quickly they have grown to a tremendous says size just making words are probably 4%. 5% of the assets and they'll be the six largest institution of course were concerned about losing the symbolism of having the an institution that was homegrown on our West Bank in headquarters in the Twin Cities and moving off to San Francisco and that that's important but what's more important is whether or not they will function we've got a couple of things working in our favor here. When is the the laws they Community reinvestment act and The Regulators that need to approve this the antitrust laws which I think have been Start a tailored lately too. In fact that facilitate these types of mergers on occasion where there's overlap. They have to do a few but the community reinvestment act actually makes them demonstrate that the effect on communities will be positive effects of the local communities that they are currently located in two. Either think that legislation is needed or changes in current legislation are needed to ensure that excessive consolidation does not occur in about that in that course. I think those do you know, I mean one of the phenomena as you hold us up to the entire Global picture of these Banks now or operating on a global basis and that one is very unusual economic time because the u.s. Is Herman island of economic growth soon as you looked up to other nations, they're not doing nearly as well. If it's to the north or south of us in the devaluation of the Canadian dollar in the Mexican peso or Europe or they've got double-digit employer unemployment and who are the Asian markets themselves in Japan. So, you know, all of a sudden Are banks come out very very strong on a global basis. And that's where they're going to serve the question is. Do you know what type of role are they going to play internationally mean? Where are they going and we need to be I think that they need to find new ways to demonstrate. Can to ensure that they are in fact going to serve the the domestic markets in the United States as well as the local communities. I don't know that it's you know, I can compete with some of the neighborhood things but they've they've tried to lead in this area. I mean, we have a friend since in the east side of Saint Paul to reaching out to the Southeast Asian Community even so far as having a baby at the principal officer in a financial institution is mom, so I mean, there's been a lot that they're doing but I am concerned and then your question is am I concerned about this to concentration will affect competition that means us to fax from the studies that come in say it does a bag fees with his last competition in California or higher. So that's study that's been done by the fed and we need to do they need to address that they can't expect to, you know to impact to cooperating that way but there's also course the other Prospect is more competition, you know, we friends since today. There's a big fight going on. About the the credit union to Credit Union Roland first one of the justifications, is that a no credit unions compete with banks and that type of competition. If in fact you're going to have Banks or not going to be in the local market places Minnesota Democratic Congressman Bruce vento speaking earlier with Minnesota public radio's Bill Catlin, so we're going to talk at this hour more about Bank mergers. Are they a good idea? What concerns do you have many people had experience with a bank that says merge with another bank at what's been your experience. If you'd like to join our conversation today with a question or comment to please. I'll give us a call here in the Twin Cities. The number is 227-6002 276 thousand. The toll-free number is 1 800-242-2828. 1 800-242-2828. We are joined today by Minnesota Public Radio senior business and Senator Chris Farrell High Chris in today why this is this is big news nor'wester a big bank here in Minnesota. This is I think we heard the 6th largest merger was this that we see this coming and what do you think what we saw it coming but we had the wrong Bank most of the speculation had in Wells Fargo have assumed that you was Bancorp run by Gruene Hall fur hood come out of Wells Fargo that he would make the acquisition. That's First Bank cuz they've they've done some mergers and they've also bought Piper jaffray, but instead it was Norwest the other major bank and in this area that made the move. So what is this? What is this mean for Norwest? We heard the car rental say homegrown Bank tell us about you know, what they do all this fits with Wells Fargo and what is this going to be for the customers? Why is it that we're having this incredible merger wave in the banking industry and there's several factors at work one is very simple to an old economic principle. We have way too much capacity. We have way too many banks and not enough business. It's a slow growth business any industry with too much capacity and slow growth go through a period of consolidation. We've all said deregulation of a deer's Congressman vento mention this year. The interstate rules have been relaxed The Regulators have relaxed rules there once recognized that banking has too much capacity and not enough growth. So we're getting his consolidation is happening partially for the deregulation. Another part of it is technology technology makes it easier to run your far-flung Empires and you have databases and databases can make your business better. My favorite way of thinking about this is it should have happened 200 years ago, but we had barriers that we've set up to you prevent these types of banks. Growing in this country what happens at a very short. Of time really over. Of a decade what should have happened over a hundred years, but let's talk about this. We looked at that why this is happening. Look at this Northwest deal just for a second here. And you know, what? What does this mean for Northwest me? Will Norwest continue to be what it's been or how does it change? It looks like at least on the surface on paper a great deal your merges. It's a it's a more substantial institution competing in a world where there's a lot more Behemoth you and I probably will be holding this same sort of conversation to three years from now. We'll be talkin about the First trillion-dollar Bank. Where is Citibank is now What's 700 billion and 1/2 that's when The Travelers and everything happens travel demerger that is done with Travelers. It gets into the California market and Wells Fargo had been in serious trouble Wells Fargo has swallowed first interstate and it was a murder. That was terrible did not go well looks like they bought them down. They've been improving Norwest comes in there and buys it a good time and it's getting a good franchise and it's a real powerhouse in in the western part of the country and it's been a Powerhouse here for now a Powerhouse. Does that change at all because of this I assume that their the bank names of the banners will now say Wells Fargo no longer say Norwest. I mean, what does what is that? Even that name change in the bank Whitwell expect as they're happy. Why is it that a lot of big local banks developed in a place like Minneapolis or are you going to tell him go to any state was a big local bank? And one of the reasons was so that the companies and your consumers and customers could get access to credit. That's why they grew up in the world that were in today. The serious question in Minnesota is Will Minnesota businesses be denied credit. I have access to enough Capital that they need to grow because Norwest is now just Behemoth with his headquarters in San Francisco. And everybody agrees. The answer that is no we have any problems and it's a surprise. We all like to have there's too much money sloshing around anyway, so I don't see Minnesota businesses being hurt because the headquarters is going to move or because you've had this merger in terms of customers, then it's a question of Wolfies. Be raced more rapidly will Norwest treat customers not as well as it has been passing. It has a reputation treating its customers well because it's not headquarters here anymore. If you look at it as a fascinating aspect to this merger, which is Wells Fargo was the bank that really taught the rest of the banking industry how to lay off people. They really did they laid off people they were tough and their quantitatively driven and boy Jaden likes expensive real. State hey, we're going to make everything ATM machines and they so they are the hard-nosed bankers Norwest has had a very different strategy is not going to lay off strategies bit of training strategy and they kept a lot of their expensive real estate because there were customer-friendly, I think part of what this merger reflex is that strategy in World a bigger Banks is probably the right strategy strategy is the right strategy for this time. Okay, so that won't change so I don't think that will change now but what it does mean is that this bigger Behemoth will have some growth prospects and we'll be able to keep up with the Bank of Americas and be able to keep up with the city corpse and the fidelities and the credentials in terms of spending on technology in order to stay ahead in the global race to get your savings in my savings and does so many people are moving away from Banks and other areas, I mean What is eventually matter to a lot of people and I don't think it will eventually matter to a lot of people though. They'll always be these these hiccups in these periods of time where someone will gain too much Market power in a local community and I'll hurt the customer but the barriers of what we call if you know the jargon is the barriers of Entry me and basically you want to open a bank. It's not that hard you want open a mutual fund. It's not that hard. There's a lot of capital available. The rules are the rules are there, but it's not owner of safe in Europe words, very very difficult to open a bank here by comparison is not recharging to Wifey. You know, there's a lot of computers out there that want your lunch and they're going to go after it. We're talking today about the bank mergers in the wake of the news today that minneapolis-based Norwest Corporation and Wells Fargo & Company headquarters in San Francisco are merging and if you'd like to join our conversation today, give us a call in the Twin Cities. The number is 227-6002 276 thousand a toll-free number is one 800-242-2828 any questions or comments you may have about the bank mergers and general this merger. What will see in the future if he's been a good idea lots of questions at. I'm sure listeners have and feel free to give us a call to 276 thousands of Twin Cities. Number one. 802-422-8284 size is a strategy makes sense in the economic reasons are sound Alice Alice Murphy this type of this merger of any type of these Bank mergers in the question is will the Management's be able to execute in together these organization or where you end up with big but he missed dinosaurs Angela Japanese Banks remember but a 1980s or is article after article about the Japanese Banks. They were the biggest banks in the world and they're going to take over the rest of the world and US Banks were puny by comparison what it turned out is that they were very bureaucratic. They were very slow. They were not profitable and they haven't done anything in Europe. We have the universal Banks and Universal Banks do everything. They do mutual funds through Securities. They do banking they're terrible. They're not very profitable. They have been going from one market to another Market or not picking much money. They're not doing very well. So one of the unanswered questions is you can do these deals. You can pay a price to take How she makes it easier to do these deal, but will it work in Kenzie's Management's do it and the history of mergers and Acquisitions tells us that very few Management's will pull it off a couple will but very few. What does it take? I mean what what will it take do you think for the managers of this new bank to it to make it work? Yeah. It's it's really boring stuff as a lot more fun to talk about the forces that are driving consolidation in Willis her consumers and what should be the federal policy be but it's going to come down to things like employee incentives. And do you have a clear message so that employees know what they're doing? And do you maintain close contact with the customer? Where does the employee and a talkin to the bureaucracy rather than talking to the customer if those kinds of things that determine whether or not the six 8 if you look at the Wells Fargo merger with First Interstate that was such a disaster was they laid off a lot of people and all the sudden their customers were upset because they didn't know who to Talk to and they lost customer records because they trying to knit together these computer systems and you're a customer and also his loss and they can't find it for 6 months. That's it's the execution strategy on paper was absolutely Brandon Wells Fargo had been you know the model of taking over other companies. So you always have to whenever we're talkin about mergers and Acquisitions and all this excitement. It gets down to these Harvard Business review article stuff that really matter. We were talking about something boring here. Is that what you're saying that there will be some no West employees that will be out of work or you look at any of these emerged. I don't know the details in terms of that. But if you look at most mergers and Acquisitions answer that is some employees lose their jobs. I would gather with Norwest considering their history and all the effort that they made not to lay off employees that if it did happen it would be small and it may be actually in California supposed to hear. Okay. Our first caller is Brian from Minneapolis. I Brand a your question or comment I've been I guess I should say checking account number of Northwest for the last 3 years cuz I bought my mortgage with them and they have this a great thing about no interest or I'm sorry, no charges plus interest on your account if you have to buy your mortgage to Northwest, but I have to tell you it's the most frustrating. Frustrating thinking group I've ever dealt with they they promised you something they call you up and they offer you a line of credit and then they come back and say well actually don't qualify. I can't imagine why I don't because that's ever professional. I make a lot of money but it's annoying. You know, they call you the offer you something and then they take it back. It's telemarketing bad that business I would leave Norwest in a moment if I could get free checking with interest and another bank and probably could if I looked around but I'm a professional I don't have time during my weekdays to try to find a better checking account and I find it really annoying. So what I'm calling about is well, maybe this merger, maybe some of the transition is going to happen with another company that maybe has better customer service has better policies. Maybe it's good because you're West. You know what I'd leave you in a moment. If you're listening to me Norwest ICD a moment. All right. This is the bankers nightmare of all these consolidations and I think a lot of people will do exactly what he may end up doing which is you know, I don't really have the time but I am going to take make some time to leave if it continues that I'm not being treated as a good customer and there are a lot of local institutions that would be perfectly happy to take your money. There's some things that need to be done. We need a little more right deregulation on say things like automated teller machine so that can make it even easier for banks that don't want to charge fees on customers to set up no-fee ATM networks. There's a salon that does line, but I think this is a great opening for Community Banks and I got an easy line to cell which is where local will listen we care and were based in, Minnesota. And believe me that's happening around the country and last year there a hundred eighty-eight new Banks created and their new Banks being created all the time and don't think that the mutual fund companies which have customer service down basically making the same move our higher fees and all that a given here with an emerger like this or what's been the experience with some of these other mergers and particularly mental health admission in California, which is one of the Marcus has been studies that you did end up with higher fees. There's two trends that are going on and it's been very difficult to disentangle them banks used to be extremely regulated and it was a lousy deal you gave them your money and they gave you a poster about the banking industry. Don't know what they're talking about. Unless you need a new toaster maybe that you want to pay a deregulated world have to pay you interest. You know that think we should make some money off of your money. And so we were moving toward a world of deregulation and part of deregulation is rather than having the subsidy. They're going to try and charge you for what you use banks have done a terrible job of doing this some of those fees are legitimate some the fees to seeing what they can get away with at the level where fees are now in the customer resistance. It's out there. I'm skeptical that they can raise fees much more than they have. They've milk that so part of the fee. The increase in fees has been part of this deregulation and part of it has been agreed and testing how far you can go in the marketplace but they've created high enough umbrella that there's more competition coming in underneath that so I'm a little bit skeptical that you can take the train to the past 10 years. And if you look at a chart of those fees you go. I'm going to be broke. Why should I put any money in there and what will moderate and you can call me in 2010 and tell me whether I'm right. All right. Saint Paul, good morning, Northwest and Trust Bank close Bank merges with the u.s. Bank. And now this new merger has come with Fargo well, but my son note to Chicago area and the US Bank doesn't have any branches. I wonder what would be the situation now with this new murder at surrett Chicago area is concerned still not in the Chicago area. This is where you get into this this area with banking Norwest is the largest mortgage lender in the country and they're everywhere everywhere, but we still have these barriers to Interstate banking that do you make a dinner party with these burgers in this day in age of Technology? With the bay, but maybe that's not the case division. The Dream of Jeannie was the founder of Bank of America in a used to rant and rail before Congress is at the turn of the century Inn in 1919. 119. Tell me you said just say you can have a national retail store. I can buy my socks from this from from Sears here and I can fight here. Why can't I bank and that's how the rules were We're Men are so genuine fear about concentration of capital concentration that kind of that money was different and if you allowed this concentration of money, which is what he wanted to do that that would help reverse economic effects on competition and there was less of a worry about where the Red Sox are stoves are appliances that are being sold nationally. Now, what's happening with Bank of America merging with Nations Bank in this is a step in the western part of the country in Midwest in the western part of country with Norwest and Wells Fargo is moving closer to a world where if you move from, Minnesota, The California and your Bankers Norwest. It should be easy. Ackley. It should be easier now. We'll see how they need to go their computer systems and everything else like that. But that's what we're moving toward. We're talking today about Bank mergers by news today that done or Weston Wells Fargo are merging and we're talking today with NPR senior business and economics editor Chris Farrell and we will continue our discussion in just a moment. I'm Chris Roberts farmers in the Red River Valley say they're on the brink of a new farm crisis. The weather is great. But poor prices in crop disease are forcing many of them to declare bankruptcy on Mondays All Things Considered Farmers sound off to agriculture. Secretary Dan Glickman as he comes to lobby for change in the freedom to Farm Act that story and the rest of the day's news on all things considered beginning at 3 on Minnesota Public Radio Kano W FM 91.1 in the Twin Cities. We should mention that what's coming up at noon today as part of our mid-day broadcast recent California Commonwealth Club speech from New York journalist and author Pete Hamill. I'm Mr. Hamel is a former newspaper writer in the author of the best-selling novel snow in August and he'll be talking about newspapers and journalism and the standards of both Pete Hamill coming up a new today on our mid-day broadcast. So do state to Quick Check of our weather forecast today should be a partly sunny in Northern parts of the region no chance of showers and Central sections and a few showers and thunderstorms likely in the far south will see highs today mainly in the sixties showers are likely in the South again tonight and Central Minnesota as well. A few thunderstorms are possible in these locations thickening clouds across the far north is the floss tonight 45 to 55 tomorrow all across the region of chance of showers may be some thunderstorms and high mainly in the sixties across the region for the Twin Cities this afternoon be coming mostly Play at 40% chance of showers by late this afternoon The Hive 65 pretty good chance for some showers tonight, though. That chance is 60% aloe in the low-to-mid 50s tomorrow should be cloudy a 40% chance of showers and thunderstorms and a hive 65 to 70 at last report of the Twin Cities and mostly cloudy sky and the temperature sixty-three degrees. It is 26 minutes before 12 noon. We're talking about the bank mergers during this hour of. Midday. I'm. Finelli in today for Gary action and our guest is MPR senior business and economics editor Chris Farrell and if you have a question or comment for Chris, so feel free to give us a call. The number the Twin Cities is 2 to 76,000 to 276 thousand. The toll free number is 1 800-242-2828. 1 800-242-2828. We should Dimension a cover Chris that though we mentioned that shareholders and the FEDS need to approve this yet. The good Lords of both companies have approved this merger between Norway. Wells Fargo basically, how was Washington looking at this and other bank mergers? Any Bruce vento Express right just concerned. There's not a mass movement to put a halt to them the recognition that there's some very good reasons why this why this is happening, but there are some good reasons why consumers would be worried and upset on the regulatory point of view and from Washington's point of view the really big issue and the dialogue that is growing in its skin of the conference is being held on this in the Federal Reserve Bank of Minneapolis is at the Forefront is this whole issue of too-big-to-fail we have and we're all protected up to $100,000 on her deposit at the bank. Not a whole lot of us have $100,000 in our checking accounts with the bank, but they are protected up to that and if they fail that would have the potential catastrophic ramifications not only here in the US but globally so we have this too-big-to-fail certain banks are just too big that we wouldn't let go under well to some extent that's a license to take bigger risks because you're too big to fail. Hey, you know hits if I think that's kind of calculus. at work Well, we we could end up a trillion dollar bank's pretty soon. I'm not that far away. Too big to fit and we have a lot more banks that are too big to fail. They just growing all the time. Do we need to change the regulatory policy in the Federal Reserve Bank of Minneapolis May which is quite sensible proposal, which means I probably will never happen but it is quite sensible and it says we completely protect the individual just completely protect but we'd anybody who puts a million dollars in the bank for example, so they are uninsured and with the too-big-to-fail says that million-dollar deposit, by the way, he is completely insured right 10% of that is at risk. In the theory there, he's not really individuals that are putting these huge deposits on its companies and a lot of those companies are other financial services companies. And so these depositors the management of these deposits from Saved by the ways our money safe is it there has been taking these days and took try to tap into the power of the market and the analytical community and the basic nervousness at that big corporations don't want to take any risks with their cash. That's not there is money. So they don't want it to be with an institution that's going to fail and that might be a way of creating more discipline. With these very large institutions, obviously. This is a big debate some people like it's some people don't like it. But we do need to move releases the dialogue that we need to move something like that. Cuz otherwise you're going to end up with a banking system that stupid fail here from some more colors of dogs in Rochester High Doug worried about the the profit sharing and the amount of money they have on deposit what I do worry about if the sum total of 500 shares that I have an Norwest stock, which has been hovering, you know, say around 40 for the last six months and I noticed after this merger announcement. It's it's heading south and I'm wondering why and what are the long-term prospects for a Northwest stockholders. I think there are two reasons. Why is headed south there may be more released to that that can identify right now part of it is Norwest have been on the list of takeover stocks Time Magazine. Article about the 10 most likely take over candidates and Norwest was on that list. So there probably was something of a takeover premium in there. Cuz if your shareholder typically it's better to be bought out then the baby acquire when you get your money up front. The other part of it is if you look at the financials of Norwest, they're extremely impressive you look at the financials at Wells Fargo, not very impressive. Wells Fargo will drag down North Norwest financial performance. Now the theory behind this merger is that Wells Fargo has bottomed out and it's on the way up and then is Norwest comes in it will help build it up even faster and then longer-term shareholders will receive a higher return on assets higher return on investment return on Equity. However, you want to measure it but in the short run clearly there is an earnings impact from this merger that is not wholly positive and it's being reflected in the stock price or topic today is a bank merges were talking with NPR senior business and economics editor Chris Farrell, if you'd like to join the conversation, we do have several people on the line, but if you'd like to give us a call to 276 thousand in the Twin Cities or one 800-242-2828. Let's go to Will and Hibbing high high say my son's a medical school and I've been over in Europe and he sometimes gets a little help from over Europe and $200 for campus at the him from Finland. $18 over there $18 in New York 1150 at the local bank here. That's 4752 $100 that's uncalled for but what I'm really concerned about nature Crystal holic say that Wells Fargo start playing the riveters Futures market and let's say that they really have to take a bath namely as you probably know many years ago $1. 360 and it went down to $80 with Robert Rubin became Secretary of Treasury and 140. Are you in Australia and show me the people who likes or else? I don't want to make sure ain't playing around with foreign currencies and Text and talk Rihanna Japanese Central Bank, for example doesn't even if they don't have an accounting. I'm at your books. Please text on these horrendous foreign currency derivatives markets when the banks were going to take a bath. Okay. Thanks. Will it's a very good question banks are vital to foreign currency when we like to think about it is, Minnesota, Minnesota businesses. Are a lot of Minnesota businesses are big exporters. You go to the banks for your foreign currency, you are once you go overseas for dealing with lots of different currencies. So banks are very important intermediaries in the growth of global trade in the US economy. One of the big change in the US economy. The past 20 years is we have become more export-oriented and Morganford oriented. Both require foreign currencies playing and derivatives banks are big players and playing going around just to do that and they are playing some some games, but the currency in the derivatives markets are important and they are growing who's watching it combination of three entities. Regulators so the Federal Reserve the Comptroller of the currency in various other Regulators all have an interest in what's happening in the SEC will take a look. So there's a number of regulatory agencies that are in Fault the market if you are Volkswagen and you're doing a some currency trades you have an approved list of banks that you do those currency trades with on the other side cold on the other side that deal and if you're not on the approved list and I going to do it with you and if you start bad news starts coming out about you you'll fall at least it's not perfect by the way. Usually what happens if someone gets surprised and you get hit but the hits tend to be reasonably small and the third one is the Management's and do you know no matter what no management wants to oversee a failing institution, even though they happen. It is an area. We are there needs to be a lot more work of international coordination. He's absolutely International quartered coordination and work among regulators, and I'd like to see more Market information. Published be accessible so that the market itself could do more policing. We know we need that because of these banks are really Global Behemoth The regulatory structure in the market information needs to be changed. All right to Helen and Cindy Anthony your question or comment because I think we're still paying for the Savings and Loan stuff what happens sometimes don't aren't quite as good and the interest rates go a little higher and and they find out that it was a can't call it different things. Go. Thanks. Alan got a good question. It's a wonderful question. That's what's haunting. A lot of The Regulators right now in haunting people on Congress and you was a case of terrible deregulation and opened up an opportunity for a lot of people to really do terrible things. And we took what for years really to work our way through that whole situation and had a genuine Economic impact so it's a little bit sounding like a broken record. That's why it is so important is too big to fail argument is too big to fail debate that's going on and like with wheels question and he was asking about you essentially an international Regulatory and fisherman Alan Greenspan's been wandering around the country giving speeches about we need to rationalize our regulatory structure to take account of this new world in these Global Behemoth. That's why I would argue so strongly for bringing the market to Baird and what I mean by the market is not some abstract and today. It's actually I want to bring big companies and their Finance departments. And people knows Finance departments who salaries dependent. I'm not making a major mistake with something like a deposit want to bring their knowledge and their analytical techniques to Bear to watching the banking industry. Also with a lot of The Regulators would like to do. So, what would happen to me SNL situation was a horrible case of deregulation. This is this is nowhere near like the SNL this is happening for much more rational reasons what's going on? If we are not in a comparable SNL situation a lot of people ever there's no reason to ignore the lessons of the SNL is at the same time. I like for Minneapolis. Go ahead. Good morning. Gentlemen, I have a question about I'm calling as the little guy and I'm interested in this discussion, but I'm also frustrated as at Perry's been talking about seems like a national even a global issue of these Bank mergers and I don't really believe that these banks are focused on the little guy's interest on my, you know, $5,000 in personal savings at a having a bank. I don't feel comfortable that I can that I personally can be Workforce to expect change from these people you read my mind because I was thinking I'm a member of a credit union and the I had no clue a lot of credit union was before I joined through work just seemed like a good thing to do. When does the more I realize about it? The more you're describing the antithesis of these large mega-corporations these large global banking institutions, and I'm wondering if there's currently some legislation going through Congress on the banking industry is trying to I'm saying the basic Industries try to do this, but they're trying to curtail membership of credit unions. How do credit unions fit in will will do seagulls of trend of credit unions taking a place that banks used to be as for the smaller and that's a great question. I think credit unions are Critical competition to the banking industry for the individual there's no question about that and the credit unions are going to get some protections coming out of legislation. I think that's fairly clear exactly how the rules will be written sure that's still subject to debate but the credit unions are going to get some protection look at the history of history of consolidation sebetto spilling more accurate history consolidations you end up with a bunch of Biggie's may end up with a real Big E's which provides real opportunity for a lot of smaller institutions. And one of the reasons why analysts expect the US banking industry will only shrink from 9000 to say 7000 or 9000 to 6,000. You can find numbers. I haven't seen anybody below 5,000. I'm sure you could find somebody with One Bank. This is not the Jurassic Park economy were one dinosaur dominating the whole thing. Westwood has something to say 53 Banks has to do with a very diverse economy very heterogeneous economy. And there's a real opportunity for smaller banks in this market and Technology also allow smaller Banks to work with each other in ways that they couldn't before and so you don't want credit unions to be eliminated through some sort of bizarre act of Congress and he's pretty confident these at cops. It's going to happen but this credit unions are important and I think the real danger of these big Banks is that the alien ate too many of these two $500 deposit that is a long-term mistake. That is the secret of a Walmart into the secret of a Target is not the look down at the $500 deposit, but the banking industry has large you suffered from his they look at then see that's costly the very short-term respect it provides opportunity for others. It's a few minutes left in our conversation today with NPR business in your business and economics editor Chris Farrell Teresa Minneapolis. Go ahead. Text John. Okay. I'm a small-time depositor, which you have touched on some but I shopped around and the percent you could earn an interest was like 1.3 1.2. It was just her but I remember when I was a kid it was 6% and you could make half decent interest on the money you were giving to the bank for them to use and you'd make some kind of proof that it wouldn't be anything to blowing your nose about it, but I mean with something And now you can't even do that and you had a show about a week ago on why people aren't saving money. It's because the interest is so low and I was wondering and you both so touched on will they're putting fees on everything and I used to be a Norwest person, but I turned to TCF because it was cheaper. But then you have to be careful the Seas and you have to be careful about how much money you have in your checking account yet. Just have to be careful Straits from a decade ago. My mother still recalls. Finally those days when she bought those 15 16% certificate of deposit and she bought 10 years and never been able to do that again and low risk investment that paid you 15 16% is a wonderful. Of time. If you happen to have bought those CDs so part of it is that what part of it really is at the banking industry is losing out to mutual funds and you can take your money and put it in a money market mutual fund and a major mutual fund company in today's market make 45% So you get a little bit of Interest today on on your accounts, but a lot of the money is being siphoned off elsewhere and therefore they have to pay up too much money in order to attract that money. And so it's part of part of a calculation. Okay, Richard in St. Paul your next go ahead through Reagan's Miracle days a huge Bank in Chicago Field and somehow they put the ex-president of Amoco in and I don't know what happened to change the name of the bank and all that. But the point is the politician some I rather always seem to protect the big people in that one. These people are all protected and yet they really should have lost all their money but somehow or other they didn't and people who lost when you're actually right and he is Continental, Illinois in this is this is the Dilemma kind of Illinois got into trouble. So the big depositors have lots of money. I called up your treasures inside get our money out of their you start a run on the bank. Now, Illinois had Financial relations all around the world not just in Chicago area and not just in the United States, but worldwide would you end up with a lot of bad loans all of a sudden and people money would be made good and what would be the economic ramifications of this and it scares people and it's not just a big people getting protected you're afraid of what happens to the economy for all haunted by the bank failures that happened in the 1930s and it was clearly had a dramatic impact on our economy. So that's the haunting concern and when you deal with these big banks in Illinois with a big bang back then now it's good size Bank everybody knew what it was today. It's nothing, you know, it just be a tiny little thing and eventually emerged out of existence. Well now you start multiplying that and so let's What's that? You know Bank of America Nations that you can't let these things feel he's absolutely right, but you can't let him feel because the economic consequences are so dire. Theoretically we would want these Banks to fail. We really would want these Banks to fail you'd want them to get hit you want the shareholders to lose their money you want the Management's the closer doors and be fired their stock options are absolutely worthless The Economic Consequences of that are so great that we're afraid of installing that kind of discipline and that's where you end up with proposals like the Minneapolis fed. Will you take a sliver you put just a portion of the Sun in sure what you said the big person the uninsured money at wrist not the whole thing cuz you want to prevent a run but enough that they'll take a hit and they won't want it to happen again, but he's actually right. But policymakers blank. And I've read a lot of academic papers and you know, you make a very very good argument why you should let them fail. But if I were policymaker sitting there and contemplating what might be the unemployment rate if I let this Bank fail, I'm not going to do it. We have less than a minute left. So more of these we do we continue the stock markets going where are interest rates going. I have no idea where you're right, but I can tell you this there will be more they will continue and just the same as being useful is Bank mergers are stock prices Bank stocks are high values that the currency or using to the merger. What you said was ten to one that was the head of the conversion rate when the stock market tanks that will slow it down because you have to use cash instead of stocks. It's alright. Thank you Chris a dollar Minnesota Public Radio senior business and economics editor Chris Fair. And thanks to all who called him with your questions in the comments today Midwestern farmers are feeling the pinch from changes in farm policy and competition from agricultural subsidies overseas Hill. Can I or my neighbor or the u.s. Producer compete against them? You can't Minnesota Public Radio is examination of agriculture in a global economy. And what some are calling the new farm crisis continues Tuesday and Wednesday on the Morning Edition at 7:20 on Minnesota Public Radio Canada, W FM 91.1 in the Twin Cities. The time is now five minutes before 12 noon. Let's hear from Garrison Keillor and The Writer's Almanac.