Lewis William Seidman, the chairman of the Federal Deposit Insurance Corporation (FDIC), set up during the US savings and loans crisis of the 1980s and the first chairman of the Resolution Trust Corporation (the precursor of the textbook good-bank-bad-bank model) died on May 13 2009.
He was in banking a historical figure, but the reason for writing into my blog is that he was a personal friend. A friendship borne in his old age, through interacting with him when he was a speaker and then chairman of the advisory council of the Asian Banker Summit. Lots of fun with him and Birge Watkins, who accompanied him everywhere, and later his family members as well, espcially his daughter Carrie and her son. Birge and Bill were at the Summits in Singapore (2005), Bangkok (2006), Jakarta (2007) and at another of our China conferences in Beijing (2006).
At the Singapore Summit, he met the former Democrat vice president Al Gore for the first time. It is an interesting thing that I have seen happening, where very senior American officials who have known about each other for years, meet each other for the first time half way around the world at one of our conferences. Bill worked for several Republican presidents, first as an economic adviser to President Gerald Ford and later President Reagan, who appointed him to chair the FDIC in 1985 and then the RTC in 1989.
I was finishing University in the mid-1980s, fully unaware of the banking crisis of historic proportions taking place in the US savings and loans institutions. The models developed there were to be used extensively in the Asian Banking Crisis of 1997, during which time I had set up The Asian Banker and had become a purveyor in the industry. I do think that the US Stress Testing developed from the current 2008-9 crisis will similarly provide models for other governments to use in future, as the Swiss government appears to be using already.
At the Singapore meeting, Bill was in fact impressed with Al Gore, and was surprised to find from their interactions on stage during the conference as well as behind the scenes that they shared similar views on issues relating to “sustainability” in the financial services industry.
The Bangkok conference was memorable because of the traditional Thai massage that I organised with Bill, Birge and another great friend, Michael Ong, the eminent risk management expert from Chicago’s Stuart School of Business. Bill, who was 84 by that time, and suffering from a hip injury from a fall from a horse many years before, sprang up like a spring chicken right after his massage by a lovely Thai masseur. We were all lying in a row next to him, and surprised to see him so spritely. He loved these things, going out with the boys, having a good conversation and seizing the day.
He climbed the Great Wall of China in Beijing after the 2006 conference for the first time at age 85. Bill, Birge and Bill’s daughter Carrie, slipped away to Bali right after the Jakarta Summit. I joined them for two days to see how they were doing. Bill fell so ill there with what he called a “Bali Belly”, or what was probably a stomach flu, and it knocked him down badly. He was miserable. As I knew Bill only in his old age, I needed to be reminded that he was a college football player when he was younger, and then a polo player as an adult, and that he hated being ill. Carrie told me that at his age, he was afraid most of dying and especially dying of a cold or pneumonia, which interestingly was what probably finally got him this month.
The story should be told about Bill having this grand massage in Bali – four masseurs working as a team on each of his four limbs. He loved the life. he loved most being around people, any people. What a life! No wonder he hated the idea of being dead so much!
My first Thanksgiving dinner with an American family was with Bill and five of his six children and their families in his country home in the island of Nantucket, Mass in 2007. I met his lovely wife Sally, who despite a personal disability, still retained her charm and beauty well into her old age. How did she keep up with this irascible man, I wondered when I met her. But it was obvious to me that despite their many children, she only cared for being cared by him, and no one else mattered. She gave him all the freedom he wanted, and he came back to her every time.
The family dinner was itself eventful, with opinions being thrown around the room, and Bill constantly teasing his favourite granddaughter, whom he nicknamed “Sharon Stone” for obvious reasons. But the next day, just the two of us went out in his really beat-up truck to have lunch at his favourite live sea food store just outside town. We picked the Maine lobsters and had them cook them right there and finished off the plate at a small table right there in the store. (I think there is a picture of us outside that fish store in the Photo Commentaries section in my blog.)
The following year, I was to visit Carrie and her son Keaton in Albuquerque, New Mexico, where they lived and where Bill maintained a ranch. She was to share with me many of the challenges her father faced as he worked tirelessly in public office. I think you can imagine how important these conversations were to me, even as a foreigner from the other side of the world. In many ways, the Seidman family treated me like family, and I enjoyed that tremendously. I can only imagine that they did that to tens of others who passed through their doors, and in that way, Bill himself recruited the loyalty of many of the young men and women who would say they owed their careers to him.
Bill’s father was a wealthy businessman in his own right, with a very folksy relationship with the local community. Bill was to carry that trait into his own adulthood and it was to play a prominent role in the empathy he showed to the local bankers who were losing their small banking businesses during the S&L crisis of the 1980s.
My understanding of how the banking industry took shape in his time was enrichened through the many snippets of conversations we had along the way. In one such conversation, he told me how disgusted he was about Basel II. In his time, he was the US reporesentative to the Bank for International Settlement, which decided on the original Basel accord in 1984.
“We decided on Basel I in the room in one day,” he told me about the meeting which he attended then. “These guys (in Basel II) have committees and sub-committees and they still can’t decide on anything.”
Bill could have chosen to build a very credible business of his own. In fact, he was an entrepreneur in the telecommunications industry in the 1970s, at the time when Gerald Ford called him into public office. Carrie told me that sometimes it did pinch him a bit when he came across friends who became incredibly wealthy in the private sector. But he could not help being who he was, someone who would go out of the way, at great personal expense, to help those who could not help themselves.
Notwithstanding that he was most famous in the financial services industry, unknown to many, the achievement he and his family were proud of most of all was that he was a founding member of the Grand Valley State University in West Michigan, where in his time, there was no University. Today, it has an enrollment of about 22,000 students.
It is significant to me that Bill died on 13 May 2009, the last day of The Asian Banker Summit this year. I had not invited him to Hanoi the previous year and this year to Beijing because I was worried about his physical constitution to make the trans-pacific flight, even if he would have thought nothing of it. But I thought about him constantly.
More recently, I got to watch him on CNBC where he was chief commentator, almost every night (day time in the US) where the current crop of economics experts would look to him to provide small gems of insights into how this crisis was any different from the past.
Just hanging around Bill taught me many things, about American public life, about the people he influenced and about the kind of leadership that people like him were able to demonstrate just by taking on the responsibilities as they were dished out to him. I was able to meet subsequent generations of leaders in the US financial system, people like John Bovenzi, who was with the FDIC until recently (he is now with a consulting firm), who say they owed much in their careers to Bill.
Bill was not ambitious in the way we would characterise the ambitiousness of Wall Street or Washington insiders today. He just had a sense of duty and every time he was called to play a role, he was not found wanting, and played them with gusto. He was opinionated, he was stubborn, he held his ground and he was led by his own radar of what was sensible. But he was never found wanting to be there when his government needed him.
This I think is the legacy of greatness he left for me, and I am sure others, to learn from and emulate in our own careers. Aptly, the FDIC office complex in Arlington, Virginia is named after Bill Seidman, but ah, isn’t that Bill Seidman, my friend!