Remembering Bill Seidman

Bill Seidman, publisher of Bank Director magazine since inception and whom we lost this year, was the most astute 88 year old any of us will likely encounter. For 15 years he co-chaired Bank Director‘s annual M&A conference in Scottsdale, dropping keen insights on banking and on the economy like most conference-goers drop two-foot putts.

One of my first meetings with Bill, shortly after he finished his responsibilities with the FDIC, was in his modest office in Washington. President Clinton, new in office, was presiding over his economic summit in Little Rock. Bill Seidman, then CNBC’s chief commentator, was due to go on the air that afternoon to evaluate the summit’s progress. In the background, volume turned so low I was barely aware it was on, was a live feed from the conference. For two hours Bill and I talked, and there was no question in my mind that I had his full attention. When I later watched him on the air, Bill dissected, as only he could, the speeches that had been white noise to me, but which Bill’s incredible mind could pick up and evaluate, without missing a bit of the totally unrelated subject matter he and I were discussing.

After that, I was never surprised when Bill could kick off a Bank Director conference at eight o’clock in the morning with a 20-minute discussion of an economic development he’d learned about when he woke up an hour before. Or how he could climb off a red-eye from Beijing, take a cab to the Capitol, and testify on a proposed financial regulation. Nor did it surprise me when he was a voice in the wilderness, calling baloney a Fed chairman’s economic pronouncement or disputing the collective views of a sea of Nobel laureates, only to be proven spot-on right months or years after the fact.

Since 1993, Bill wrote a column for this magazine. A capital R Republican, one would expect Bill Seidman to be pretty much a laissez-faire capitalist. Certainly few in his political party were calling for more government regulation until recently, the lessons of the current economic meltdown not on many radar screens nearly a decade ago. Yet here are a few of Bill Seidman’s observations in his Bank Director column:

On Enron, in 2002: “A good free market operates like a prizefight-plenty of chance to slug it out, but not below the belt. An unrestricted market is like a ballroom brawl where the fight results in widespread destruction of both people and the place, and the winner may be the dirtiest fighter on the scene. The trick, of course, is to have the right rules that promote fair competition without stopping it altogether… Enron was a brawl, because no regulators were empowered to deal with a good part of the market behavior.“

On executive compensation, in 2004: “I travel abroad a great deal and I used to be asked how we did things in the U.S. Questions like, `How did we achieve such a competitive, clean, honest, and efficient business economy?’ Lately the questions are somewhat gleeful and gloating- `I guess you Americans are not as ethical as you appeared to be.’ In fact something has gone wrong, as it almost always does in a period of bubble economy like we had in 1995-2001. Reflecting on the situation, it seems to me-and this will shock my pro-deregulation friends-our problem is that a free market doesn’t work well without a lot of government.“

At heart, Bill Seidman was a very smart but prudent man, one whose small-town midwestern values and his background as a CPA colored everything he did when he became arguably the most powerful financial regulator ever. He never changed who he was, and he was someone everyone at Bank Director, and even those in government with whom he famously clashed, loved. Writing about the difficulty banks in 1998 were having in attracting deposits, his philosophy on solving problems said it all: “Like most other problems, in time this funding problem too will pass. But in the long run, we will all be departing the scene, so for today, taking action seems the preferable course for solving a serious evolving problem.“

Bill Seidman never stopped taking action before he departed the scene, and while he’ll be missed-oh how he’ll be missed at Bank Director and in our industry-he left a great path to follow and a great approach to following it. We’re grateful to have known and to have worked with such a great and grounded man.