Monday, March 27, 2023

>> "DIRECT CONNECTION" IS MADE BY MPT TO SERVE ALL OF OUR DIVERSE COMMUNITIES AND IS MADE POSSIBLE BY THE GENEROUS SUPPORT OF OUR MEMBERS.

THANK YOU.

LIVE FROM MARYLAND PUBLIC TELEVISION, THIS IS "DIRECT CONNECTION" WITH JEFF SALKIN.

>> Jeff: GOOD EVENING.

WELCOME TO YOUR "DIRECT CONNECTION."

LATER IN THE PROGRAM TONIGHT, WHAT BANK CUSTOMERS NEED KNOW ABOUT THEIR DEPOSIT INSURANCE.

THAT'S AHEAD.

BUT WE BEGIN TONIGHT WITH YOUR HEALTH AND THE CHALLENGES OF MANAGING DIABETES.

JOINING US IS DR. RENA MALEK, ENDOCRINE ALSO ON AT THE MARYLAND UNIVERSITY CENTER FOR DIABETES AND AN ASSOCIATE PROVERBS OF MEDICINE AT THE UNIVERSITY OF MARYLAND SCHOOL OF MEDICINE.

DOCTOR, THANK YOU FOR JOINING US.

>> Rana Malek, MD: MY PLEASURE.

THANK YOU FOR HAVING ME.

>> Jeff: BIG NEWS IS THE PRICE OF INSULIN COMING DOWN P. WHAT DOES THAT MEAN TO YOUR PATIENTS?

>> Rana Malek, MD: IT WILL MEANS A LOT.

NI IT'S IMPORTANT TO HAVE A CONTEXT ABOUT THE PRICE OF INSULIN.

SO ABOUT 30 MILLION AMERICANS HAVE DIABETES, AND OF THOSE 30 MILLION, ABOUT 7 MILLION NEED INSULIN TO MANAGE THEIR DIABETES.

IN THE LAST OVER A 20-YEAR PER FROM 1996 TO 2016, THE PRICE OF INSULIN WENT UP 700% WHEN ADJUSTED FOR INFLATION.

SO, FOR EXAMPLE, A VIAL OF INSULIN WENT FROM $21 IN 1996 TO $255.

SO THOSE WERE -- THAT I WAS HUGE ECONOMIC BURDEN ON PATIENTS.

SOME OF THE VIEWERS MAY BE SAYING, WELL, WHEN I WENT TO THE -- WHEN I PHARMACY, I PAY A COPAY FOR MY INSULIN.

IT NEVER COSTS THAT MUCH.

WELL, FOR UNINSURED PATIENTS OR PATIENTS WITH HIGH DEDUCTIBLAL PLANS AND UNTIL RECENTLY MED CARE PATIENTS THEY WERE OFTEN CAIG THOSE LIST PRICES AND PAYING HUNDREDS OF DOLLARS IF NOT THOUSANDS PER MONTH FOR THEIR INSULIN PRICES.

THERE'S BEEN A LOT OF PRESSURE TO TRY TO BRING THESE PRICES DOWN FROM PATIENT GROUPS AND PROFESSIONAL ORGANIZATIONS, AND MOST RECENTLY THE BIDEN ADMINISTRATION WAS ABLE TO PASS AN INFLATION REDUCTION ACT LAST YEAR THAT THE COST OF INSULIN FOR MEDICARE RECIPIENTS CAN'T BE MORE THAN $35 A MONTH.

BUT AGAIN IT DIDN'T HELP THOSE WHO DID NOT HAVE MEDICARE INSURANCE.

AND SO BECAUSE OF SOME MARKET FORCES, SO THERE'S A GENERIC VERSION OF INSULIN THAT'S BEEN APPROVED IN THE LAST YEAR, AND SOME ALTERNATIVE SOURCES OF INSULIN LIKE THE STATE OF CALIFORNIA IS GOING TO PRODUCE ITS OWN CHEAP INSULIN, AND NON-PROFIT GROUP THAT'S A PHARMACEUTICAL KANE WALLED CIVICA IS ALSO GOING TO BE PRODUCING LOW-COST INSULIN THAT WILL BE AVAILABLE FOR ABOUT A THIRD OF THE AMERICANS THAT NEED INSULIN THERAPY.

SKO ALL OF THESE MARKET FORCES PLAYED A ROLE IN KIND OF PUSHING THE HAND OF FOOTBALL INDUSTRY TO LOWER THAT COST.

AND SO NOW FOR OUR PATIENTS WHERE THEY WERE PAYING THESE REALLY HIGH PRICES, THEY CAN PLAN TO ANTICIPATE PAYING LESS PER MONTH FOR THEIR INSULIN.

>> Jeff: THE CRAZINESS OF LIST PRICES AT A PHARMACY, ALL SORTS OF MEDICINES, IS PROBABLY ANOTHER SHOW WITH THE WORLD OF DISCOUNT COUPONS AND ALL THAT.

WHAT DID IT MEAN FOR THE PATIENTS OF YOURS WHO DIDN'T HAVE THE MONEY WHO WERE TRYING TO MAYBE STRETCH OUT THE INSULIN?

>> Rana Malek, MD: EXACTLY.

INS INSULIN DIFFERENT THAN A PILL.

YOU TAKE A PILL ONCE A DAY WHEREAS INSULIN, THE DOSE YOU WOULD TAKE MAY DEPEND ON WHAT YOU'RE EATING, YOUR PHYSICAL ACTIVITY, AND SO YOU HAVE SOME FLEXIBILITY SOMETIMES IN THE DOSE.

BUT IF SOMEONE HAD TO BUY TWO VIALS OF INSULIN AND PAY THROWS TO $600 A MONTH FOR IT, THEY MAY SAY, INSTEAD OF TAKING 15 UNITS WITH MY DINNER THAT DR. MALEK PRESCRIBED, I MAY ONLY TAKE FIVE SO I CAN MAKE THAT DOSE LAST OVER TIME.

WHAT THAT DOES IS THAT LEADS TO HIGHER BLOOD SUGARS, AND WE KNOW THAT HIGHER BLOOD SUGARS INCREASES YOUR RISK OF EYE DISEASE, KIDNEY DISEASE, HARD DISEASE, AND WHAT PEOPLE WERE DOING WAS THEY WERE SACRIFICING THEIR FUTURE HEALTH BECAUSE OF THESE ECONOMIC CONSTRAINTS.

AND AS A SOCIETY, WHAT MATTERS IS THE FACT THAT WE SPEND ONE IN FOUR HEALTH CARE DOLLARS ON DIABETES COSTS.

SO WE ARE PAYING THE PRICE FOR THIS ECONOMIC PRICE GOUGING AS WELL FURTHER DOWN THE LINE WITH HEALTH CARE.

SO FOR OUR PATIENTS NOW, WHAT I HOPE WE CAN SEE HAPPEN IS THAT THEY CAN USE THE RIGHT PRESCRIBE AMOUNT OF INSULIN BECAUSE THEY CAN AFFORD WHAT THEY'RE GETTING AT THE PHARMACY.

THE OTHER THING I WILL SAY IS THAT BECAUSE OF THIS INCREASE IN PRICES, WE'VE ACTUALLY BEEN USING OLDER INS LINS LAIGHTD.

THESE OLDER INSULINS WE WERE USING MUCH MORE IN THE 1980S AND 1990S CALLED NPH AND REGULAR THAT PEOPLE COULD GET FOR $20 AT WALMART, WE'VE BEEN PRESCRIBING A LOT OF THEM.

THEY'RE A LITTLE MORE NUANCED THAN THESE NEWER INSULINS AND THOSE PATIENTS WHO WERE USES IEWNGSZ THOSE WE CAN USE THEM.

>> Jeff: LET ME REMIND OUR VIEWERS 5 A QUESTION FOR OUR GUEST GIVE US A CALL TO NUMBER ON THE SCREEN OR SEND AN EMAIL TO LIVEQUESTIONS@MPT.ORG.

GIVE AS A PRIMMER ON DIABETES.

THERE'S TWO DIFFERENT TYPES.

>> Rana Malek, MD: SO THERE'S TYPE 1 DIABETES WHICH AFFECTS A LITTLE UNDER 2 MILLION AMERICANS.

THAT IS WHERE YOUR OWN BODY DESTROYS THE CELLS IN YOUR PAN CREASE THAT MAKE INSULIN.

WE THINK OF IT AS A ILL TBLS THAT CHILDREN GET BUT PEOPLE CAN GET DIAGNOSED IN ADULTHOOD AND WE EVEN HAVE PEOPLE WHO ARE DIAGNOSED IN THEIR ELDERLY YEARS.

AND THEN THERE'S TYPE 2 DIABETES WHICH IS THE CATCHPHRASE FOR EVERYTHING ELSE.

PEOPLE WITH TYPE 1 DIABETES MUST USE INSULIN TO MANAGE THEIR DIABETES.

PEOPLE WITH TYPE 2 DIABETES, THE MAJORITY ARE ABLE TO BE MANAGED WITH NON-INSULIN MEDICATIONS.

>> Jeff: LET'S TAKE A PHONE CALL FROM ALLEGANY COUNTY.

THIS IS LISA.

LISA, THUL FOSTE THANK YOU FOR THE CALL.

GO AHEAD.

>> Catherin.>> Speaker: MY MOTHER IS DIABETIC AND SHE USES TWO DIFFERENT TYPES INSULIN.

ONE IS LONG-TERM AND THE OTHER IS A SHORT-TERM.

CAN YOU EXPLAIN THE DIFFERENCE THE TO PUBLIC.

>> Rana Malek, MD: YES.

SO, YOU KNOW, YOUR BLOOD SUGAR DOESN'T JUST GO UP FROM THE FOOD THAT YOU EAT.

I TELL PEOPLE THAT WHILE YOUR BRAIN NEEDS SUGAR TO FUNCTION AND YOUR BODY HAS TO HAVE A CONSTANT SOURCE OF PROCEED DUCING SUGAR SO THAT YOUR BRAIN CAN FUNCTION BECAUSE IF YOU DIDN'T EAT WHEN YOU SLEPT AND YOUR SUGAR WENT TO ZERO, YOU WOULD DIE IN YOUR SLEEP, SO THAT'S REALLY WHAT THE LIVER IS FOR.

THE LIVER HOLDS ONTO SUGAR, AND WHEN SOMEONE ISN'T EATING, RELEASES THAT SUGAR.

IN THE SITUATION OF DIABETES, THE LIVER GOES A LITTLE WILD AND JUST DUMPS SUGAR INTO THE BLOODSTREAM, AND SO LONG ACTING INSULIN IS USED TO CONTROL THE LIVER'S SUPPLY OF SUGAR THAT'S COMING OUT.

THE SHORT ACTING INSULIN IS USED TO CONTROL WHAT HAPPENS TO YOUR BLOOD SUGAR IF YOU EAT A SANDWICH OR YOU EAT A MEAL.

AND SO PEOPLE WITH TYPE 1 DIABETES NEED TO BE TAKING BOTH TYPES OF INSULIN IN ORDER TO CONTROL THEIR BLOOD SUGARS.

>> Jeff: WHY ARE MORE PEOPLE COMING DOWN WITH DIABETES?

>> Rana Malek, MD: SO NAS A VERY COMPLICATED QUESTION.

AND I OFTEN SAY THAT WHEN WE THINK OF DIABETES, WE TEND TO THINK OF IT AS A DISEASE OF THE INDIVIDUAL, RIGHT?

IT IS A PERSON'S RESPONSIBILITY TO EAT RIGHT.

IT'S A PERSON'S RESPONSIBILITY TO MAINTAIN A HEALTHY WEIGHT AND A PERSON'S RESPONSIBILITY TO EXERCISE.

THAT'S ALL TRUE.

BUT WHERE WE'RE MISSING THE BOAT IS THAT ALL OF THOSE INDIVIDUAL DECISIONS ARE INFLUENCED BY THE SOCIETY WE HAVE STRUCTURED, SO WE HAVE FOOD POLICIES THAT MAKE HEALTHY FOODS MORE EXPENSIVE AND FOODS THAT ARE BAD FOR YOU VERY CHEAP.

WE SUBSIDIZE CORN PRODUCTION.

WE PUT HIGH FRUCTOSE CORN SYRUP?

JUST ABOUT EVERY PROCESSED FOOD THAT WE EAT.

THOSE PROCESSED FOODS ARE ACTUALLY DESIGNED TO MAKE YOU WANT TO EAT MORE.

THEY HAVE A LOT OF SALT AND SUGAR AND FAT.

BUT THEY ALSO DON'T MAKE YOU FEEL FULL AND THEY HAVE ADDICTIVE PROPERTIES.

WE HAVE FOOD DESERTS.

I PRACTICE IN WEST BALTIMORE WHERE ACCESS TO STORES THAT SELL HEALTHY FOODS AND VEGETABLES IS REALLY LIMITED AND WE KNOW THAT THAT'S TIED TO OBESITY AND CARDIO VASCULAR DISEASE, AND WE MARKET UNHEALTHY FOODS TO CHILDREN, AND SO PEOPLE FROM A YOUNG AGE ARE KIND OF STARTING TO EAT THESE HIGHLY PROCESSED FOODS.

I JOKE THAT MY DAUGHTERS WHO ARE THE DAUGHTERS OF AN ENDOCRINOLOGIST CAN TELL YOU ABOUT BASICALLY EVERY FLAVOR OF POTATO CHIP THAT'S OUT THERE BECAUSE THAT'S WHAT'S BEING TARGETED TO THEM AND THEIR PEERS.

>> Jeff: DO YOU HET EM LET THEM EAT IT?

>> Rana Malek, MD: I DO MY BEST TO RESTRICT IT BUT THEY'RE NOT ALWAYS IN MY SIGHT.

SO YOU HAVE TO BE REALLY TEACHING NUTRITION.

WHEN WE THINK ABOUT EXERCISE AND MAINTAINING IT, IT MEANS HAVING ACCESS TO PLACES TO EXERCISE.

GYMS AREN'T NECESSARILY COVERED BY HEALTH INSURANCE.

AND YOUR ACCESS TO SAFE SIDEWALKS, SAFE NEIGHBORHOODS, PUBLIC PARKS ARE ALL INFLUENCED BY THE ZIP CODE CHA THAT YOU'RE LIVING IN.

SO I OCH SAY THAT WE'VE STRUCTURED OUR STOISHT TO MAKE IT REALLY EASY TO GET DIABETES AND REALLY DIFFICULT TO TAKE CARE OF YOURSELF.

>> Jeff: SO THIS TREND TOWARDS MORE PEOPLE DEVELOPING DIABETES, IS IT JUST THE UNITED UNITED STATES?

IS IT JUST THE WESTERN WORLD?

ARE THERE PLACES ON THE PLANET WHERE IT'S NOT HAPPENING?

>> Rana Malek, MD: SO IT TENDS TO BE -- DIABETES IS RISING WHEREVER THERE STARTS TO BE MORE AVAILABILITY OF EASY-TO-EAT PROCESSED FOODS.

SO WE SEE REALLY HIGH RATES OF DIABETES RISING, FOR EXAMPLE, IN INDIA, IN MORE AFFLUENT AREAS IN NIGERIA.

THE WE'RE SEEING HIGHER RATES OF DIABETES IN THE MIDDLE EAST.

BUT IT'S ALL TIED TO THESE SPECIFIC ISSUES RELATED TO PROCESSED FOODS, LIMITED EXERCISE.

>> Jeff: VIEWER QUESTION.

WILL WE SEE LESS INSULIN DEPENDENT DIABETES BECAUSE OF THE NEW EASY WAYS TO DETERMINE BULLDOG SUGAR AND DETERMINE WHAT TO EAT?

IT WAS ALWAYS DIFFICULT TO STICK YOUR FINGER ALL THE TIME.

>> Rana Malek, MD: SO THAY THAT THE INDIVIDUAL IS REFERRING TO THE WAY WE MONITOR BLOOD SUGAR.

SO HOLD OF FASHIONED WAY IS A LITERALLY PRICKED YOUR FINGER, DROP OF BLOOD ON A LITMUS PAPER ESSENTIALLY.

WE NOW HAVE THESE DEVICES CALLED CONTINUOUS GLUC COAST MONITORS THAT YOU WEAR FOR TEN TO 14 DAYS, DEPENDING ON THE BRAND, AND IT WILL TELL YOU YOUR BLOOD SUGAR AT ALL TIMES.

IT WILL ACTUALLY SEND YOUR BLOOD SUGAR TO YOUR PHONE.

IT CAN BE YOUR HOME SCREEN.

YOUR PARTNER CAN FOLLOW YOUR BLOOD SUGARS AND KNOW ANY TIME YOU CHEATED, FOR EXAMPLE.

AND SO IT MAKES IT EASIER TO MONITOR AND IT ALLOWS PEOPLE TO MODULATE THEIR BEHAVIOR.

IF YOU KNOW THAT A PIECE OF CAKE IS GOING TO TAKE YOUR SUGAR TO 300, YOU MAY NOT EAT AS MUCH OR YOU MAY NOT EAT THE CAKE.

IT MAY NOT NECESSARILY RESULT IN LESS PEOPLE DEVELOPING DIABETES, BUT I THINK WHAT IT WILL DO, WHAT WE KNOW IT DOES FROM STUDIES IS THAT IT IMPROVES THE CONTROL OF PEOPLE WITH DIABETES.

>> Jeff: YOU HAVE A DIABETES PREVENTION PROGRAM.

UNIVERSITY OF MARYLAND MEDICAL CENTER MIDTOWN?

>> Rana Malek, MD: YES.

BASED AT MIDTOWN.

AND WE ARE DOING IT IN CONJUNCTION WITH MHCRC GRANT WITH JOHNS HOPKINS SO IT'S A BALTIMORE DIABETES PREVENTION PROGRAM.

>> Jeff: WHAT DO YOU DO THERE?

>> Rana Malek, MD: SO THE DIABETES PREVENTION PROGRAM IS BORNE IDENTITY A STUD I SEVERAL YEARS AGO WHERE WE LOOKED AT PEOPLE WITH PRE-DIABETES, AND SO IF YOU HAVE PRE-DIABETES, I TELL PEOPLE IT DOESN'T MEAN YOU'RE AUTOMATICALLY GOING TO GET DIABETES BUT YOU BOUGHT A WHOLE LOT MORE TICKETS TO THE LOTTERY, SO IF NOTHING CHANGES YOUR RISK IS HIGHER.

AND SO WE LEARNED SEVERAL YEARS AGO THAT IF WE CAN HELP PEOPLE MAKE INTENSIVE LIFESTYLE CHANGES THAT RESULTS IN BODY WEIGHT LOSS OF 7%, WE CAN REDPIEWS THEIR PRIKS OF GOING ON TO DEVELOP DIABETES.

AND SO THE DIABETES PREVENTION PROGRAM IS A STRUCTURED 16-WEEK COURSE WITH LIKE USUALLY IT'S A DIABETES EDUCATORS WHO HELPS LEAD THESE CLASSES.

PROPER NUTRITION, EXERCISE, STRESS MANAGEMENT, AND THE IDEA IS THAT AT THE END OF THE STUDY -- THE 16 WEEKS YOU WILL HAVE LOST WEIGHT AND REDUCED THAT RISK OF DIABETES.

>> Jeff: IN JUST A SENTENCE IF YOU CAN, WHAT SYMPTOMS SHOULD PEOPLE BE ON THE LOOK-OUT FOR?

>> Rana Malek, MD: FOR DIABETES?

SO THE FIRST THING I WOULD SAY IS THAT THERE ARE A LOT OF PEOPLE THAT DON'T HAVE ANY SYMPTOMS.

SO TYPE 2 DIABETES DEVELOPS OVER TIME, AND IF YOUR SUGAR SLOWLY GOES UP OVER TIME, YOU GET USED TO THAT.

AND SO THAT'S WHY ABOUT A THIRD OF PEOPLE WITH DIABETES DON'T EVEN KNOW THEY HAVE IT.

WHEN THE SUGARS GET HIGH ENOUGH, PEOPLE MAY NOTICE EXCESSIVE THIRST, FREQUENTLY HAVING TO GO TO THE BATHROOM, WEIGHT LOSS, BLURRY VISION.

>> Jeff: DR. RANA MALEK, WE'LL HAVE TO LEAVE IT THERE WITH THE UNIVERSITY CENTER FOR DIABETES AND ENDOCRINOLOGY.

THANKS FOR THE TIME.

NOW A NUMBER OF BANK FAILURES IN UNITED STATES AND GLOBALLY HAVE PUT THE FOCUS ON THE STATE OF YOUR MONEY.

WE SPOKE WITH MARIANNE SKILL PRESIDENT OF -- NOW DEAN OF THE UNIVERSITY OF BUSINESS AT UNIVERSITY OF MARYLAND.

DEAN SCULLY, THANK YOU FOR JOINING US.

PEOPLE GET NERVOUS WHEN THEY READ ABOUT BANKS IN TROUBLE.

WHAT SHOULD CONSUMERS KNOW ABOUT THE SAFETY OF THEIR MONEY?

>> Mark MAINCH SURE.

I DON'T NECESSARILY WANT TO QUOTE JANET YELIN ALTHOUGH I THINK SHE'S DONE A VERY GOOD JOB WHEN SHE WAS THE PRESIDENT OF THE TREASURY AND THE PRESIDENT OF THE FEDERAL RESERVE.

THE BOTTOM LINE IS THAT I DON'T THINK CONSUMERS SHOULD BE OVERLY CONCERNED THAT THERE IS SOME SORT OF CONTAGION FROM THE MOSTLY ISOLATED PROBLEMS OF A COUPLE OF BANKS THAT HAVE FAILED AND A COUPLE OF BANKS THAT ARE KNOWN TO BE SEEKING OR HAVE JUST SUCCESSFULLY SOUGHT PARTNERS.

I DON'T THINK THIS IS A SYSTEMIC ISSUE.

SO I THINK THAT'S THE FIRST THING TO KNOW.

BUT THE SECOND IS THAT IT'S ALWAYS GOOD FOR CONSUMERS, AND FOR THAT MATTER SMALL AND LARGE BUSINESSES, TO BE AS FINANCIALLY LITERATE IN A BROAD SENSE AS THEY CAN BE, AND TO REALLY UNDERSTAND DEPOSIT INSURANCE, TO REALLY UNDERSTAND SOME OF THE SOURCES OF INFORMATION THAT ARE VERY ACCESSIBLE TO THEM IN TRYING TO EVALUATE EITHER HOW TO CONTROL WHERE THEIR MONEY IS HELD AND/OR HOW TO EASILY UNDERSTAND SOME COMPARISONS FROM ONE BANK TO ANOTHER.

THE FDIC WEBSITE IN PARTICULAR HANDLES ALL COMMERCIAL BANKS AND ALL SAVINGS AND LOANS, SO WHETHER A COMPANY IS PUBLICALLY TRADED OR NOT, YOU DO NOT NEED TO GO TO THE SEC.

YOU JUST CAN GO TO THE FDIC, SEE THEIR FINANCIAL INFORMATION, PULL UP REPORTS THAT COMPARE THE RATIOS OF ONE BANK TO ANOTHER, BUT MORE FUNDAMENTALLY AND MORE EASILY, THERE ARE TOOLS ON THAT WEBSITE AND YOUR BANKER WILL HELP YOU, YOUR BRANCH MANAGER, YOUR COMMERCIAL BANKER, ACCESS INFORMATION ON HOW TO STRUCTURE YOUR ACCOUNTS TO MAXIMIZE THE AMOUNT OF DEPOSIT INSURANCE THAT YOU CAN RECEIVE.

THERE HAS BEEN, GOING WAY BACK TO THE FINANCIAL CRISIS IN 2008 AND 2009, A TOOL THAT'S CALLED EDIE, THE ELECTRONIC DEPOSIT INSURANCE ESTIMATOR.

AND IT WILL ALLOWS CONSUMERS IN PARTICULAR TO DETERMINE HOW TITLING OF DIFFERENT ACCOUNTS WILL PROVIDE THEM WITH FAR MORE THAN $250,000 IN INSURANCE.

AND YOU CAN ASK YOUR BANK, MANY BANKS ARE NOW OFFERING SUITE SERVICES THAT ALLOW TO YOU MAINTAIN THE ACCOUNT WITH THAT BANK, THAT BANK THAT YOU KNOW, THAT BANK WHERE YOU KNOW THEIR STAFF AND, MORE IMPORTANTLY, THEY HOPEFULLY KNOW YOU, AND YET HAVE THE MONEY AUTOMATICALLY SWEPT INTO OTHER BANKS, ALWAYS KEEPING AN EYE ON THE BELOW THAT $250,000 INSURANCE LEVEL.

SO NUMBER ONE, STAY CALM.

NUMBER TWO, STAY INFORMED AND EDUCATED.

AND NUMBER THREE, UNDERSTAND THE TOOLS THAT ARE AVAILABLE TO YOU AND VERY ACCESSIBLE.

>> Jeff: FEDERAL OFFICIALS HAVE BEEN A LITTLE LESS THAN COMPLETELY EXPLICIT ABOUT WHAT BANKS WOULD QUALIFY FOR TOTAL COVERAGE OF ALL DEPOSITS.

THEY TALK ABOUT SYSTEMICALLY IMPORTANT INSTITUTIONS.

WE HAD SILICON VALLEY BANK.

YOU HAD SOME INCREDIBLY WAY ABOVE $250,000 ACCOUNTS THE NORMAL INSURANCE LIMIT IN THE HANDS OF THESE VENTURE CAPITAL FUNDS, VERY WELL-FUNDED COMPANIES, AND ALL OF THAT WAS COVERED.

SO I GUESS WHAT I'M ASKING, AS A PRACTICAL MATTER IF SOME SMALL BANK SOMEWHERE IS GOING TO FAIL, HOW COULD THE FEDS REALLY NOT COVER EVERYBODY?

>> Mary Ann Scully: WELL, IT'S A GOOD QUESTION, AND I WOULD AGREE WITH YOU THAT THE FED HAS HAD SOME DIFFICULTY PARTLY BECAUSE I THINK THAT THEY ARE REMINDED THAT THE ACTION TO BROADEN THE INSURANCE, WHETHER IT'S TO RAISE THE INSURANCE LEVEL OR TO DO, AS HAD BEEN DONE SHORTLY AFTER DODD-FRANK WAS PASSED IN THE 2010 PERIOD, FOR A PERIOD OF TIME ALL DEPOSITS ARE GOING TO BE INSURED.

THAT DID HAPPEN.

I THINK PEOPLE FORGET THAT HAPPENED FOR ABOUT A TWO-YEAR PERIOD WHERE ALL TRANSACTION ACCOUNTS, SO ALL CHECKING ACCOUNTS WERE GUARANTEED INSURED, NO LIMIT FOR A PERIOD OF TWO YEARS.

BUT THAT WAS ESSENTIALLY AN ACT OF CONGRESS.

AND SO THERE NEEDS TO BE A DETERMINATION THAT THIS IS A SYSTEMIC PROBLEM.

CLEARLY TO SOME EXTENT THE OFFICIALS ARE RELUCTANT TO SAY THIS IS SYSTEMIC BECAUSE THEY DON'T BELIEVE THIS IS SYSTEMIC.

AND SECONDLY, JANET YELIN CANNOT DO THIS ON HER OWN.

SO I THINK THAT'S A LITTLE BIT OF THE REASON FOR THE BACK-AND-FORTH, BUT I PERSONALLY BELIEVE THAT IF A CONFIDENCE PROBLEM CONTINUED AND AT ITS ROOT THIS IS A CONFIDENCE PROBLEM.

ALL FINANCIAL SERVICES INSTITUTIONS ARE DEPENDENT ON CONFIDENCE.

NO ONE PUTS ALL OF THE DEPOSITS OF THEIR DEPOSIT CUSTOMERS IN A LOCK BOX.

THEY INVEST THEM IN RESIDENTIAL MORTGAGES, IN SMALL BUSINESS LOANS IN THE CASE OF SO MANY LARGER BANKS, IN LARGER CORPORATE LOANS, AND IN SECURITIES THAT TIMES LOSE VALUE NOT BECAUSE THEY'RE BAD CREDITS BUT BECAUSE INTEREST RATES CHANGE.

SO THAT CONFIDENCE IS IMPORTANT.

IF THAT CONFIDENCE WOULD SEEM TO BE IMPAIRED ON A BROAD LEVEL, I PERSONALLY BELIEVE THAT THERE WOULD BE MORE ASSURANCES ABOUT INSURANCE COVERAGE COMING FORWARD.

FOR THOSE THAT ARE WITH SMALLER BANKS, IN PARTICULAR I REMIND THEM THAT THERE WERE MANY FAILURES, UNCOMFORTABLE, DURING THE -- -- UNFORTUNATELY, DURING THE GREAT RECESSION, AND WHILE THOSE DMOTSES MIGHT NOT HAVE BEEN INSURED, THERE'S GENERALLY A VERY ORDERLY PROCESS OF FINDING SOMEBODY TO ASSUME THOSE DEPOSIT LIABILITIES.

THE BANK THAT I LED FOR A NUMBER OF YEARS TOOK OVER A FAILED BANK IN 2014, AND ONE OF THE QUESTIONS WE WERE ASKED AS WE ENTERED AN AUCTION FOR THOSE ASSETS AND TO BE A GUARANTOR OF THOSE LIE ABOUT IT IS WAS WOULD WE ACCEPT DEPOSITS THAT WERE IN EXCESS OF THE DEPOSIT INSURANCE LIMITS.

WE SAID, OF COURSE, WE THOUGHT THAT WAS GOOD BUSINESS.

IT WAS A WAY TO DEEP MORE CUSTOMERS IN THAT COMMUNITY.

AND IN ALMOST EVERY CASE THAT'S WHAT HAPPENED IN THE COURSE OF THESE ORDERLY -- PROCESS THAT THE FDIC SEES.

SO YOU'VE GOT A COUPLE OF THINGS GOING ON THERE IN A SENSE BUT THAT MAY NOT HELP PEOPLE SLEEP AT MIGHT NIGHT, A SENSE THAT THIS WILL BE COVERED IF THIS CONTINUES TO BE VIEWED AS A PERVASIVE CONFIDENCE PROBLEM.

TWO, A PRECEDENT, THAT AT LEAST TO CHECKING ACCOUNTS THAT HAS BEEN DONE FOR TWO FULL YEARS IN 2010.

AND THIRD, A PATTERN HISTORICALLY OF THE SMALLER BANKS THAT HAVE TAKEN OVER, HAVING AN AGREEMENT FROM A BANK THAT GOES INTO THAT RECEIVERSHIP AND BRINGS THE BANK OUT OF RECEIVERSHIP THAT THEY WILL HONOR THOSE DEPOSITS AS WELL.

AND IT'S ALWAYS GOOD, I BELIEVE, AS A FORMER BANKER, IF THERE'S MORE THAN ONE APPROACH THAT YOU CAN TAKE TO MAKE YOU FEEL COMFORTABLE, AND IN THIS CASE THERE ARE A NUMBER OF THEM, I THINK, JEFF.

>> Jeff: THE OTHER REASON A LOT OF PEOPLE ARE TAKING A CLOSER LOOK A THEIR BANK ACCOUNTS RIGHT NOW IS, YOU KNOW, WE'RE PLIFG IN A TIME OF HIGH INFLATION.

TREASURY YIELDS IN THE SHORT TERM 4%, NUDGING UP TOWARDS 5%, AND YET A LOT OF STANDARD BANK ACCOUNTS ARE PAYING YOU 0.0 SOMETHING AND PEOPLE ARE LOOKING FOR, WELL, MAYBE I SHOULD BE ABLE TO GET A LITTLE BIT MORE INTEREST SOMEWHERE.

WHAT WOULD YOU ADVISE?

>> Rana MalekMAINCH THAY THAT'S NATURAL AN DO THINK THAT THE BANKS WILL BEGIN MOVING UP THEIR DEPOSIT RATES.

BANKS HAVE HISTORICALLY ALWAYS LAGGED IN MOVING DEPOSIT RATES UP.

THEY TEND TO BE VERY QUICK AT BRINGING THEM DOWN.

SOME OF THAT'S THE FUNDAMENTAL ECONOMICS OF A BANK WHICH HAS A VERY, VERY SMALL NET INTEREST MARGIN, THE DIFFERENCE BETWEEN WHAT THEY PAY THEIR DPOS TORS AND WHAT THEY EARNED ON THEIR LOANS, BUT THAY THAT YOU'LL SEE THOSE RATES COME UP.

I KNOW THAT MANY PEOPLE HAVE BEGUN GOING INTO MONEY MARKET PRODUCTS.

AGAIN, YOU HAVE TO DO YOUR HOMEWORK THERE AS WELL.

NOT ALL MONEY MARKET PRODUCTS, EVEN THOUGH THEY CONSIST TREASURY SECURITIES AND OTHER LIQUID ASSETS, THEY'RE NOT SURED, AND SO YOU WANT TO DO YOUR HOMEWORK ON THESE INSTITUTIONS AS WELL.

>> Jeff: THE OTHER THING THAT'S HAPPENING, IF THE FED IS GOING TO CAUSE A RECESSION, A LOT OF BANKS HAVE LOANS ON THE BOOKS.

NOT EVERYTHING IS SECURITIZED, AND THEY HAVE A LOT OF COMMERCIAL LOANS.

THEY MAY HAVE SOME AUTO LOANS.

AND YOU START WORRYING ABOUT CREDIT QUALITY.

THE BANKERS START BECOMING A LITTLE BIT MORE CAREFUL IN THE LOANS THEY UNDERWRITE.

DOES THAT BECOME AN ISSUE FOR THE BROADER ECONOMY?

DOES IT BECOME AN ISSUE FOR SOMEBODY WHO IS LOOKING TO BUY A CAR THAT THEIR LOAN APPLICATION IS GOING TO GET CLOSER SCRUTINY?

>> Mary Ann Scully: SO I THINK FROM A CONSUMER PERSPECTIVE IT'S UNLIKELY TO CAUSE THAT KIND OF A CREDIT EXRURCH.

I THINK MOST -- CRUNCH.

I THINK MOST OF THE CONSUMERS THAT BE LOOKING AT THIS RIGHT NOW ARE PROBABLY GOING TO GO TO THEIR DEALER TO GET A CAR LOAN.

NOT THAT MANY PEOPLE COME TO BANKS ANYMORE.

THE BANK ROLE IN CAR LOANS TENDS TO BE BUYING THOSE PAPERS, THOSE LOANS FROM THE DEALER.

SO I DON'T THINK THAT YOU'LL SEE THAT.

I DON'T SEE ANY KIND OF A CRUNCH ON RESIDENTIAL MORTGAGES.

I THINK THE COMMERCIAL CUSTOMERS OF LOOKING OVER THEIR SHOULDER FOR A COUPLE OF REASONS.

WILL THIS HIGHER INTEREST RATE DRIVE US INTO A RECESSION?

THERE'S STILL NOT UNANIMITY ON WHETHER THAT OCCURS, BUT MOST PEOPLE DON'T BELIEVE THAT IT WILL BE A DEEP OR A LONG RECESSION IF IT HAPPENS.

AND THEN THE QUESTION IS, WELL, HOW DO THE BANKS REACT?

AND BANKS ALWAYS BECOME MORE CAUTIOUS IN RECESSIONS.

THERE WILL ALWAYS BE SOME BANKS THAT WILL VIEW IT AS AN OPPORTUNITY, THAT THIS IS A WINNOWING OUT AND AN OPPORTUNITY FORE THEM TO BEGIN WORKING WITH CLIENTS WHO ARE MAYBE WORKING WITH A BANK THAT BECOMES OVERLY AND MAYBE INAPPROPRIATELY CONCERNED.

THERE WILL UNDOUBTEDLY BE NEW REGULATIONS THAT COME OUT OF SOME OF THESE BANK FAILURES.

AND THOSE NEW REGULATIONS, AT LEAST FORE MEDIUM SIDES BANKS MIGHT MEAN HIGHER CAPITAL REQUIREMENTS.

THAT BY DEFINITION MEANS IT IS A LITTLE THEERD LEND OUT QUITE AS MUCH MONEY.

BUT I ACTUALLY THINK BIGGEST IMPACT THAT ANY SORT OF LOOMING RECESSION OR HIGHER INTEREST RATES OR TIGHTER REGULATIONS WILL HAVE WILL BE ON MORE SPECULATIVE BUSINESSES.

AND IT'S VERY TRUE THAT IN A VERY LONG PERIOD OF LOW INTEREST RATES, THAT THERE WILL WERE PROBABLY RISKS TAKEN FOR THE VERY REASON YOU ALLUDED TO.

PEOPLE ARE LOOKING FOR A BETTER YIELD.

AND SO E. THERE WERE A LOT OF DEALS DONE.

THEY MIGHT HAVE BEEN VENTURE DEALS.

THEY MIGHT HAVE BEEN PRIVATE EQUITY DEALS.

THEY MIGHT HAVE BEEN SOME VERY LARGE SPECULATIVE REAL ESTATE DEALS THAT WERE DONE THAT PERHAPS IN RETROSPECT SHOULD NOT HAVE BEEN DONE.

AND SO WHEN THERE'S A RECKONING, WHETHER IT'S THE POSSIBILITY OF A RECESSION, THE POSSIBILITY OF MORE REGULATION OR JUST THE RECOGNITION THAT HIGHER INTEREST RATES WILL MAKE IT HARDER FOR SOME OF THOSE TRANSACTIONS TO SERVICE THE DEBT, THAT YOU WILL SEE A LITTLE BIT MORE CAUTION.

AND I HAVE TO SAY I DON'T THINK IT'S GOING TO AFFECT YOUR AVERAGE CONSUMER.

I DON'T THINK IT'S GOING TO AFFECT YOUR AVERAGE SMALL BUSINESS.

BUT I THINK FOR SOME OF THE SPECULATIVE DEALS THAT HAVE BEEN DONE IN THE LAST 15 YEARS, THAT ACTUALLY MIGHT NOT BE A BAD THING.

>> Jeff: MARIANNE SCULLY IS NOW DEAN OF THE SELLINGER SCHOOL OF BUSINESS AT LOILA UNIVERSITY OF MARYLAND.

DEAN SCULLY, THANK YOU SO MUCH FOR YOUR TIME.

>> Mary Ann Scully: NO, THANK YOU, JEFF.

>> Jeff: AND THAT IS "DIRECT CONNECTION" FOR THIS WEEK.

WE'RE BACK FRIDAY WITH "STATE CIRCLE."

THE LATEST ON MARYLAND POLITICS AS WE ENTER THE FINAL TWO WEEKS OF THE LEGISLATIVE SESSION.

JOIN US NOR THAT FRIDAY EVENING AT 7:00.

AND REMEMBER TO FOLLOW US ON TWITTER @MPTNEWS.

NOW FOR ALL OF US AT MPT, THANK YOU FOR WATCHING AND HAVE A GOOD NIGHT.

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