Autobiography - The Galindo Group

Ram Galindo THE MAKING OF AN AMERICAN Page 130
seemed like very difficult work to keep straight on account of the thousands of individual
loans placed, it seemed that their system worked quite well. Through this practice of
selling loans to the public one at a time, the banks were able to replenish their funds to
make new loans. Even so, Denmark was still short of cash to fuel the growing demand
for new housing.
In an effort to supplement funds from foreign sources, the government passed a law
making any returns on these investments by a foreign person or organization free of all
taxes. The krona (Danish currency) was fairly stable and the interest rates offered were
higher than in the United States. After looking into this opportunity, I decided that my
savings would be safer there than in Bolivia, and began to invest in that market. The
main danger to me was the fluctuating rate of exchange between the dollar and the
krona. By being careful to buy when the Krona was low (many kronas per dollar sold)
and selling when it was high (fewer kronas for each dollar bought) over the years I did
quite well with this novel financial instrument. While I resisted the temptation to hedge
against currency fluctuations, the experience opened my eyes to the potential of the
banking business.
This activity introduced me to the wide world of banking and financial operations and
showed me that the imagination can be the limit to myriad ways of hedging, currency
trading, asset swapping, upstream participations, credit on a plastic card, and in general
all the functions that banks perform unseen by the common user of their services.
Attached to my experience with the 1980s crisis, this also demonstrates to me, on the
one hand that due to wide-open opportunities for abuse, regulation of these activities is
in line with protection of the common good. Therefore, it can be seen as a valid function
of government. On the other hand, history shows that the banking crisis occurred as a
direct result of government intervention in the economy with well-meaning regulations
that nevertheless are subject to the law of unintended consequences.
Thus, when we set out to form Western National Bank we wanted to have an
experienced and knowledgeable helmsman who understood all these intricacies, but
finding the right person was more difficult than I had envisioned. Ultimately we hired a
president but, although we gave him stock set-asides, he did not last very long. Over my
tenure as a director we changed more presidents than I wished. I have often wondered
if a stronger leader right from the beginning would have avoided the undesirable end
result Western suffered.
The other internal factor that weakened Western Bank toward the end was Mr. Callan’s
health. On a business trip we took together in 1986 he mentioned to me that he had
cancer of the bone as casually as if he were talking about the weather. He
recommended I keep this information to myself because he didn’t want special
consideration from anybody although he visibly was in great pain. Immediately following
that statement he plunged with gusto into our discussions about obtaining new financing
for our holding company, which by now was in difficulty with its debt. Unfortunately the
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