"We haven't got time to study it, let's just say yes." (expediency in banking) (editorial)

"We haven't got time to study it, let's just say yes"

In today's "fax-it" environment, with time and cost pressures imposing ever-tightening constraints, expediency creeps in. No organization is immune--not banking, not publishing, not any business--and especially not government.

Expediency thus becomes insidious when quality or principle are compromised to meet another end. In the construction business, for example, cutting corners to get a contract may mean someone will have to tear down and rebuild walls a year after they were put up because they don't meet fire codes.

Similarly, mass recalls of new automobiles are a costly way to correct design flaws overlooked in the frenzy of meeting a marketing deadline.

In a bank, expediency is at work when a loan is approved after only a cursory review (if any) by a senior credit committee out of fear that the credit will go to a competitor. Or when the bank buys into a marginal LBO syndication to grab up-front commissions in order to show a quarter-to-quarter gain.

In finance, as in construction and auto manufacturing, expediency can exact a stiff price. Large provisions for loan losses are one example. The huge cost of the thrift bailout, which festered for years while the inevitable was postponed for the sake of expediency, is another.

Never mind the facts. The political arena is, almost by definition, a forum of expediency. To expect otherwise is naive, yet that doesn't mean we must condone or encourage it.

Virtually everything the federal government does concerning the budget these days is expedient. Case in point: the annual ritual of ratcheting up the debt ceiling at the last possible moment because the government won't control its spending.

Many times expediency in government (and elsewhere) masquerades as compromise, that most hallowed political tradition. A group of community bankers meeting in Washington some months ago witnessed a good example of this. They were told by several senior congressional staffers that a certain powerful legislator was bent on introducing a piece of pro-consumer legislation burdensome to banks.