Tuesday, January 3, 2012

How corrupt is a country?

(This post was updated on 06/30/2014.)

There's a relatively easy way to find out. Transparency International is an organization that ranks countries using a Corruption Perceptions Index (CPI). Pre 2012, the index was a number from 0 (highly corrupt) to 10 (very clean).  From 2012 onwards, the score goes from 0 (highly corrupt) to 100 (very clean).
  • For 2011, New Zealand topped the list with a CPI of 9.5.
  • For 2012, Denmark, Finland, and New Zealand tied for first with a CPI of 90.
  • For 2013, Denmark and New Zealand tied for first with a CPI of 91.
Just for kicks, I decided to graph the historical data for the US since the index was first launched in 1995.  Note that from 2012, the score from 0 to 100 had to be normalized to go from 0 to 10 to match the older scale.

Here's how the CPI of the US has varied over the years.

And here's how the US has ranked over the years.

Kind of depressing since the country has gotten more corrupt since the inception of the index but, on the bright side, it's still within a fairly narrow band, and 2012 shows some improvement.

Monday, January 2, 2012

Finding a "safe" bank

With all the news about the economy headed downhill, a natural question that comes up is whether or not one is banking with an institution that is sound (i.e. unlikely to fail). Here are some sites that allow us to check on the health of financial institutions -- banks, thrifts, and credit unions.
Of course, the ratings themselves are moving targets and a bank that appears on the list today may no longer be on the list a year from now.

The first two links are especially troublesome because they categorize many of the banks that were bailed out, and that are still not quite out of the water according to several credible financial blogs, as 3 or 4 stars. So from my standpoint, I have more faith in the next two (and they both use the same source). For an institution to make that list, it probably wasn't reckless during the subprime years, and it probably didn't receive a bailout.

The Move Your Money project (previously moveyourmoneyproject.org) offered by TBS Bank Monitor can be used for finding a local bank or credit union. They list only banks rated a 'C' or better.

At least we can take heart that the FDIC (NCUA in the case of credit unions) insures deposits at each of the member institutions up to $250,000 per account holder (all accounts in the name of an account holder count towards that amount for that account holder), which makes finding a safe institution a bit less critical.

Finally, here is an unofficial list of banks that refused to accept TARP funds in 2009.

Ethical banking

Ethical banking is a whole different ballgame. Other than an informal wikipedia article that lists only one, now defunct, bank in the US -- Shore Bank -- there isn't much that turns up when doing a search. So ethical doesn't equate to being safe and vice versa.

Update 11/7/2014

The original article mentioned IRABankRatings.com.  The same tool is now available at TBS Bank Monitor.   The Move Your Money project (previously moveyourmoneyproject.org) has also moved there.