The past two Sundays, Treasury Secretary Henry Paulson has taken to the airwaves to tell the American people that the nation's banking system is sound.

It is. American banks rarely fail. The Federal Deposit Insurance Corp., has nearly $53 billion in insurance funds in the event they do. Most struggling banks are taken over by competing institutions. It is extremely rare that the federal government takes over a bank, such as California's IndyMac Bancorp Inc.

Paulson isn't speaking to average Americans when he makes these pronouncements. He's talking to the markets, essentially telling them "Chill, dudes."

We, as consumers, need to take a deep breath, too. History suggests we'll get through this economic slump, just as the nation recovered from the Great Depression, the 1970s recession and the economic downturn of the late 1980s/early 1990s.

This time, though, there are a lot of other pressing issues that contribute to the nation's anxiety: high oil prices translating to record motor fuel prices; high food prices; uncertainty in the housing industry; not to mention those irritating parentheses on our 401(k) statements indicating losses.

In the midst of this period of uncertainty, the Utah Bankers Association is making the rounds of editorial boards and educating consumers about the condition of Utah banks. It's a good news story that should bolster consumer confidence. Utah banks are far better capitalized than the national average — 18.18 percent compared to 7.53 percent, according to March figures, says LeeAnne B. Linderman, incoming UBA chairman and executive vice president of Zions First National Bank.

"That alone tells the story," she said. "Generally speaking, Utah banks are in much better shape as far as capitalization is concerned."

Capital, as Utah Bankers Association president Howard Headlee explains, is "the rock on which a bank is built." Banks insured by the FDIC are required to maintain a minimum level of capital reserve in relationship to their loans. Most exceed the minimums. Utah banks, on average, far exceed the minimums.

Moreover, Utah's community banks are some of the strongest-performing banks in the nation, according to the annual rankings of the Independent Community Bankers of America, Linderman said.

Although the facts and performance record is on their side, Utah bankers face a considerable challenge allaying consumers' fears about the economy. The failure of IndyMac in California has stirred concern nationwide. Locally, bank presidents and branch managers are milling about bank lobbies to personally reassure customers about the condition of their respective banks. Longtime banks point to their long, successful business histories and experience working with customers.

The Utah Bankers Association itself just celebrated its 100th anniversary. Zions Bank is celebrating its 135th anniversary. "And we look forward to another 135 years," Linderman said.

There are a lot of reasons for optimism.

In fact, David L. Brown, president and CEO of First Utah Bank, says this is a time to consider buying a home or investing in stock. "A little dose of confidence would go a long way right now," Brown said.

It all depends on where one stands. If you're a consumer living paycheck to paycheck (which a whole lot more of us seem to be doing these days given increases in fuel, groceries, health care and utilities), buying a house might seem out of reach right now. If you're living on fixed income, buying groceries and filling up the gas tank can be distressing.

The best thing most of us can do is stay the course and spend wisely. If history is a guide, those parentheses will eventually disappear from our 401(k) statements and consumer prices will fall enough to make us feel as if we have a little more cushion for discretionary spending or, heaven forbid, to save.

It's oversimplistic to blame the sluggish economy on President Bush. But there is reason to believe that once a new president is elected the nation's collective mood will improve. All new administrations start with a clean slate, and that's reason for optimism in itself.

In the meantime, we should all "chill," secure in the knowledge that the FDIC has our back, and our financial institutions, covered.


Marjorie Cortez, who as a journalist has taken a vow of poverty, thus her personal bank deposits come nowhere near the $100,000 insured limits, is a Deseret News editorial writer. E-mail her at marjorie@desnews.com