David Kemper,

David Kemper,

A weeklong electronic journal.
April 17 1998 3:30 AM

David Kemper,

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       Reading the papers over breakfast, I discern some favorable omens re public opinion on the future direction of financial consolidation in our fair land. Two (not one, but two) op-ed pieces in the New York Times come out against big business. William Safire questions the premise of Hugh McColl (that lovable CEO of NationsBank) that "bigger is better." "Mere size is not sin," quoth Safire, from none other than the original big guy, William Howard Taft. Safire goes on (in case you didn't read it) to point out the dangers of mixing banking with other business. The other article laments how we have forgotten the lessons of the '80s and will suffer under the abuse of corporate monopolies. One thing is for certain--bigger is better if you're the CEO of a bank, since your salary is usually pegged to how many assets your bank has, regardless of how profitable it is. One recalls the CEOs of Chase and Chemical Bank giving themselves $5 million bonuses each for merging their banks. Good work, guys.
       Thursday is our loan committee day, when we review and approve loans and usually get some interesting insight into human nature. Today reveals nothing more remarkable than one borrower who pledged his brokerage account to us to secure a loan ... and then borrowed from the broker without telling us. (On the same securities.) This is not good but also doesn't appear fatal, as there are enough securities. Ninety minutes and about $40 million later, I have a meeting with my HR director on incentive programs. When the good times are rolling, the president can do no wrong, and everyone wants a bonus. Actually, the Times front page today has a picture of Clinton that looks just like a frame from PrimaryColors. But I digress.
       I have an intriguing meeting in the afternoon with a guy who reminds me a little bit of an Ivy League Harold Hill (the Music Man). He has a business selling a kind of virtual foreign currency bank CD to retail customers. All these geniuses in finance can, of course, create the equivalent of about any kind of security you wish to conjure up. After the meeting, my fixed income Ph.D. comments, "Well, you can take your money to the boats or give it to him." In St. Louis, when one refers to "the boats," one is talking about the gambling boats here (right here!) on the Mississippi. We decide that putting our customers into foreign currency CDs is just not the image we're seeking. But he's sure making a lot of money.
       I catch the last quarter of my elder daughter's lacrosse game on the way home. Tundralike field conditions. And then I'm hit with the sad news that the Seinfeld episode this evening is a rerun. By reading my children such bedtime fare as The Chronicles of Narnia and Greek myths, I figured I would give them a strong foundation for their future education. Fortunately or unfortunately, however, their most complete frame of reference for Western Civilization is the life and times of Jerry Seinfeld on the Upper West Side. In moments calling for delicate moral choices, my children will invariably ask, "What would Kramer do?" Since the essential nihilism of the Seinfeld characters is, as far as I can judge, entirely outside the mainstream of Judeo-Christian thought, perhaps it's all for the best that the show will end in a month. In a show of solidarity with Jerry, though, I've decided to make this my final diary entry. On second thought, maybe Jerry should show his solidarity with bankers: How about a sitcom megamerger? Jerry could merge with Frasier and move to Seattle, and we could see Niles having dinner with the Costanzas. But who would be CEO?

David Kemper is chairman, president, and CEO of Commerce Bancshares, Inc., in St. Louis.