HOW CONGRESS CAUSES BANK FAILURES

Forget AIG, Family Banks are Actually Thriving in U.S.

Why did some banks and financial institutions fail and others succeed? There are many reasons, but one common ingredient of those that have not failed is that they are organized as partnerships and/or are controlled by a family, or are closely held by a few senior officers. That is, they have "skin in the game."

The oldest and largest partnership bank in the United States is Brown Bros. Harriman & Co., which was formed in 1818 and is a premier financial institution. Brown Bros. has weathered the financial crisis just fine because it is not overleveraged and did not take foolish risks because the partners were not playing with shareholders' money - they risk their own money every day. Banks that are partnerships are called private banks because their stock is not held by the public.