Your Bank Is Dead. Quick, Call The Hypnotist!

Gramps could go any minute, but banks only fail on Fridays, giving the FDIC carcass crew plenty of time to line up potential buyers, scrap outdated letterhead, and hire hypnotists to help bank employees remember vault codes…

If the FDIC has enough lead time, it can obtain the bank’s financial records in advance and start looking for a potential buyer. Regulators select candidates and quietly notify them, in very general terms, that a bank matching their criteria is about to go on sale. Interested parties sign confidentiality agreements and then gain access to a secure FDIC Web site with more specific information. Bids are usually due by noon on the Tuesday prior to a planned Friday closing, and the winning bidder is notified by the end of the day. The acquiring bank must then quickly assemble its own team to help with the weekend merger.

On the Friday of a typical takeover, the FDIC arrives on-site with a large team to manage the transition. (When a large bank fails, this might include upward of 100 people.) The team has two main priorities. First, it must figure out which customers’ deposits are insured and which are not. This can be a tangle, since customers can sock away money in a variety of accounts to ensure that their deposits fall under FDIC-insured limits. The second priority is getting the bank ready to open under new ownership by Monday. That involves discarding any material with the old bank’s name on it—like posters, cashiers’ checks, and marquee signs—and putting the new bank’s paperwork, advertisements, and employees in place. Specialists from other departments, such as facilities, human resources, IT, public relations, and accounting, round out the FDIC’s team. Officials once even hired a hypnotist to help a bank employee remember a vault code.

We knew federal law required the FDIC to pay back insured deposits “as soon as possible,” but hypnotists? It’s oddly reassuring.

Why Do Banks Fail on Fridays? [Slate]
(Photo: Getty)


Edit Your Comment

  1. Benny Gesserit says:

    Officials once even hired a hypnotist to help a bank employee remember a vault code.

    Trouble is, he now thinks he’s a chicken. His family’s ok with it, they can use the eggs.

    Seriously, ladies and germs, it’s just that cut-throat. I worked through the 6-month transition period of a struggling (dying) financial institution that was purchased by another. My advise to others in that situation: run, do not walk to the nearest exit. (And if that means stepping on Mable from accounting well… tough.)

    I hated when the phone rang at 930am – it was always “Bob” saying “Can you cover (name)’s role too?” which meant he/she would be escorted to the door in 15-20 minutes.

  2. Meggers says:

    What I want to know is…

    did it work?


  3. Nick1693 says:

    “It’s oddly reassuring.”

    Isnt that what hypnotism is supposed to be?

  4. weakdome says:

    Someday I will have enough money to not be FDIC insured.

  5. fonetek says:

    I can’t get good customer service from a bank that’s not run by the government. I can only imagine how much worse it gets when the government is running yor bank. Are calls still sourced to India?

  6. BuddyGuyMontag says:

    The only problem is now, they have to kill Queen Elizabeth.

  7. krunk4ever says:

    Not sure what you guys have against hypnotism, as it is real…

    From Wikipedia:

    The technique is sometimes used for medical purposes to relieve anxiety, or otherwise improve or alter behaviour. Its effectiveness has been clinically demonstrated in many areas, most notably in the area of acute pain relief. It is also used in popular stage acts in which subjects are persuaded to perform bizarre feats.

  8. Aladdyn says:

    @krunk4ever: oh, ok, as long as its on wikipedia

  9. Aladdyn says:

    seriously though I can beleive the relaxation part but i dont buy the bizzare feats stuff, its just people having fun.

  10. Voodoo Economics: The Pride is Back!

  11. timmus says:

    Anyone heard about that hypnotist who mesmerized an entire audience, then tripped over the microphone cord and cursed? It took them 4 days to clean and sanitize the auditorium.

  12. purplesun says:

    Officials once even hired a hypnotist to help a bank employee remember a vault code.

    Oh, wow. You guys just helped me fit in the final lynch pin to the massive bank heist I’m planning to do next weekend.

    … In that… book I’m writing. Yes. The book.

  13. Kounji says:

    @weakdome: That sounds like a lost wells fargo ad

  14. Hongfiately says:

    @BuddyGuyMontag: If you see Reggie Jackson working as a teller… beware. Genius again.

  15. RBecho says:

    @timmus: Funniest thing I have hears all day. I will make sure to steal, I mean repeat with proper citing later.

  16. iCanhasLs2plz says:

    @timmus: O Rly?

  17. Flame says:


    yeah….the book…’s going to be sold in the autobiography section right? lol.

  18. trogam says:

    When I count to three, you all will all buy my time share! One…Two…THREE!

    Why do I suddenly own time shares in Las Vegas, Cancun, and Jamaica? And why is there a receipt for Western Union on my desk?

  19. doctor_cos wants you to remain calm says:

    @Jim (The Canuck One): Are they white eggs…or brown?
    more obscure movie reference (than Naked Gun):
    “Have you ever seen drug-induced hypnotism?”
    “I think I just did.”

  20. Poster99 says:

    Why is the federal government taking care of “… discarding any material with the old bank’s name on it-like posters, cashiers’ checks, and marquee signs-and putting the new bank’s paperwork, advertisements, and employees in place.”

    I would have figured that’s why the “… acquiring bank must then quickly assemble its own team to help with the weekend merger.”

  21. DashTheHand says:
  22. muckpond says:

    that hypnotist business HAD to be someone in the Reagan administration’s idea.

  23. koreanforrabbit says:

    Hypnotism is for suckers. Dowsing rods are where it’s at.

  24. mike says:

    No waterboarding? I find this list suspect!!

    FWIW, howstuffworks has a great article on how the FDIC works. It’s a pretty decent read.

  25. BeeBoo says:

    If another bank buys a failing bank as in the scenario, they don’t need to check to see which deposits are covered by the FDIC, it’s business as usual. That only comes into play when a bank fails and is NOT taken over by another bank, but closes instead.

  26. @koreanforrabbit: My grandfather swore they worked.

    He also was never wrong, so I guess they do.

  27. Parapraxis says:


    (someone’s gotta be able to name that reference)

  28. ceriphim says:

    None of this BS digression on Hypnotism counts as off topic? I was actually interested in hearing more about how the FDIC makes the switch between new and old banks, but oh well.

  29. Hongfiately says:

    @ceriphim: Not talking about hypnotism could be construed by some as off topic considering the title, the image, and Carey’s comments. But that would be silly.

  30. howie_in_az says:

    I’m sure some members of our gubment would suggest slightly more.. humane… tactics for getting employees to talk. Waterboarding springs into mind because it’s completely safe and fun for the whole family!

    @Parapraxis: I think you mean “I see five fingers”, courtesy of Winston Smith, 1984.

  31. shadowkahn says:

    No, he means Captain Picard ;)

    Ever had a live taspagh egg?

  32. BytheSea says:

    My uni had a freshman shindig where the hired a hypnotist to make asses out of the willing? And it totally worked. I wasn’t very suggestable, but he still had me hold my arm out for about ten minutes without it feeling heavy, and then removed the subsequent muscle cram. The very suggestable were flying all over the damn auditorium.

  33. BytheSea says:

    @Parapraxis: Picard, Chain of Command (“the one with Cpt. Jellyroll”), but it was a ref to another movie that I can’t remember. 1984 or maybe Clockwork Orange.

  34. Parapraxis says:

    @BytheSea: @shadowkahn:

    God DAMN, not bad at all!