A state banking group says Wisconsin banks don't face the same risks as those in other parts of the country. Wisconsin Bankers Association President & CEO Kurt Bauer says there's little risk of a Wisconsin bank suffering the same fate as IndyMac , the failed California-based mortgage lender. "IndyMac's downfall was due to their business model of doing riskier loans," says Bauer. "Wisconsin banks don't engage in the same kind of lending activity."
Wisconsin also didn't see the kind of housing market speculation that occurred in California and other growth states, which means whatever housing bubble exists here is modest by comparison. "We don't have a as big a hole to climb out of" notes Bauer. "I think that's positive for Wisconsin's economy, and the banking industry."
According to the FDIC, bank earnings for the first quarter of 2008 show that Wisconsin banks outperformed banks nationally. That's due to the Wisconsin banking industry's historically conservative lending culture. The WBA says Wisconsin banks have experienced low loan losses and have almost nonexistent subprime exposure.