Posted: Feb 22, 2010 6:57 PM by Jim Hummel
Updated: Feb 22, 2010 6:57 PM
The German news program "Weltspiegel" brought it's viewers to Louisiana last week, profiling Rusty Cloutier, CEO of Midsouth Bank. While many big banks were taking bailouts last year, Midsouth was one of several community banks in Acadiana still lending.
"The reason the community banks are doing well is [that] we didn't do crazy things like they did on Wall Street," Cloutier said.
In his new book "Big Bad Banks," Cloutier is critical of big banks, blaming much of the industry's troubles on corporate greed. Cloutier also encourages his readers to make the switch to smaller banks.
"The banking segment in Lafayette cannot be better, we're very strong, no one is in trouble, and that's because we all live in the neighborhood and it makes a big difference when you see the people you affect, versus when it's someone 5,000 miles away," Cloutier said.
University of Louisiana at Lafayette assistant professor of finance Linus Wilson says banks in Louisiana were sheltered from the economic crisis because of a strong local economy, but local banks may have had an upper hand because of the close relationships with their customers.
"Anytime you can develop a close relationship to the people that you're borrowing to, that's definitely going to help," Wilson said.
Small community banks are especially of interest in Europe, where many countries only have a few big banks. That can make a financial crisis even harder to get through and small banks like ours an even more interesting specimen to study.