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The reregulatory cycle ushered in by the thrift debacle in the late 1980s, and the sheer weight and burden of the legislative and regulatory burden that ensued, caused countless bankers to harken back to Edgar Allan Poe's immortal classic, The Pit and the Pendulum.
Set in the time of the Inquisition, the story chronicles the fate of a man caught up in the frenzy of that overreaction, sentenced to death for unknown reasons. We know not whether he was a true infidel, or innocently accused, or persecuted for nominal sins that in other times might have gone unnoticed or unpunished. But in that dark, dank dungeon, based on knowledge of what befell others who had passed that way before, he "could no longer doubt the doom prepared for me by monkish ingenuity in torture."
What ensues is a perverse tale of the physical and psychological torture of this man, and his agonizingly slow, near fatal encounters with hundreds of rats, with the descent of a razor-sharp pendulum, and with a seemingly bottomless pit located in his dungeon.
Yet through it all, "[i]t was hope that prompted the nerve to quiver--the frame to shrink" from the destructive path of the pendulum. And "[i]t was hope--the hope that triumphs on the rack--that whispers to the death-condemned even in the dungeons of the Inquisition" to survive. Unable to otherwise inflict their intended consequences, the inquisitors heated the metallic walls of the dungeon to a red-hot glow, and caused them to press inward toward the pit.
While he attempted to shrink back, the walls pressed relentlessly forward, and in due course, for his "seared and writhing body there was no longer an inch of foothold on the firm floor of the prison." As he tottered upon the brink, the "agony in his soul" vented in one last loud, long scream of despair.
At that moment, he heard the hum of voices, the blast of trumpets, and the grating of steel as the fiery walls pulled back. As he "fell, fainting, into the abyss," an outstretched arm caught his and he was saved. In Poe's closing words, "The Inquisition was in the hands of its enemies."
The Regulatory Pendulum
Bank regulatory activity, like life itself, has cycles--regulation ebbs and...