Two leading figures in the world of banking -- one a top state official, one a senior federal official -- said Monday that Tennessee's banks are in good condition and predicted that they will weather the nation's current economic storm.

Both men spoke at a two-hour "economic forum" on the country's financial crisis and its impact in Tennessee. The event was held Monday afternoon at Tusculum College.

The 1 to 3 p.m. forum featured talks by Gary Beasley, manager of the Federal Deposit Insurance Corporation's Division of Insurance and Research, and Commissioner Greg Gonzales, who heads Tennessee's Department of Financial Institutions.

Later, Steve Gehret, Tusculum College's chief financial officer and the program's moderator, asked several questions to each of three Tusculum faculty members -- Dr. Antonio Bos, Dr. George Darko and Dr. Stella Schramm. (Please see accompanying article.)

The free event, which attracted an estimated 200 people, including students, was sponsored by the college, the Greene County Partnership and six local financial institutions -- American Patriot Bank, Andrew Johnson Bank, Consumer Credit Union, GreenBank, Greeneville Federal Bank and Heritage Community Bank.

Dr. Russell Nichols, Tusculum College's interim president, welcomed the audience at the college's Annie Hogan Byrd Auditorium following a buffet luncheon for about 125 community and business leaders, including the leaders of the sponsoring organizations.

The main thrust of the principal speakers was to reassure the public that, despite the seriousness of the national economic situation, Tennessee's banks are in good condition and will come through the current economic troubles.

"The economy is weak. I'm not going to tell you that it is not," veteran FDIC official Gary Beasley began his remarks.

However, he said, despite all the gloomy financial news, there have been only 22 bank failures across the country this year, and none of them was in Tennessee.

Furthermore, he noted proudly, in the FDIC's 75-year history, not a single depositor has lost a dime in FDIC-insured banks.

Recently, Beasley noted, FDIC insurance on a person's deposits in a bank was raised to $250,000 from $100,000.

However, the FDIC official presented these worrisome statistics:

* So far this year, 1.1 million Americans have lost their jobs. He said that figure is the equivalent of having everyone in Nashville and Knoxville become unemployed.

* The national jobless rate rose in October to 6.5 percent, up from 4.4 percent at the beginning of 2008.

* The United States is 11 months into a declining economic cycle, which appears to be nowhere close to ending.

* Home prices in the U.S. this year have declined an average 20 percent, and are expected to decline to 30 percent below 2007 levels.

* Housing starts nationally, which in 2005 and 2006 were over two million, this year will be down to about 950,000, and home construction down further in 2009 to a projected 830,000.

Beasley said none of the nation's "blue-chip" economic experts he knows is optimistic about the United States making a quick rebound out of recession in the coming year.

However, he stressed that the situation in Tennessee is not as serious as in states such as California, Florida, Nevada and Arizona, where too many homes were built at inflated prices with risky mortages, resulting in many foreclosures.

Beasley said many of the large Wall Street financial institutions that are in financial trouble were "not as well capitalized on average" as Tennessee banks, whose conservative policies required higher ratios of capital to outstanding debts.

Gonzales, the state's banking commissioner, was the first to speak.

He began his talk by acknowledging there is widespread "uneasiness" among Tennesseans about the financial condition of the nation and its banks.

Gonzales said he has been busy this fall speaking to groups throughout Tennessee, seeking to reassure them that banks and credit institutions in this state generally are sound and depositors' funds with them are safe.

He said the state's Department of Banking, which has less than 140 employees, has intensified its review of state-chartered banks. Those banks constitute about half of all banks in the state, the others being federally chartered.

Gonzales said "most of the out-of-state lenders" who have been active in Tennessee "have come from California."

He said his department has begun scrutinizing such lenders "to be sure the people who do business here are qualified to do business here."

He said the "greatest challenge" for financial institutions in Tennessee is that of keeping the public's confidence when people hear so much negative news from the national media on unprecedented problems among the big Wall Street investment banks and other major financial institutions.

However, Gonzales noted important differences between community banks in this state, which largely have avoided being badly damaged by the subprime lending market, and big New York investment banks that have collapsed or are under threat after taking on too much indebtedness.

"The national economic news does not necessarily reflect the local economic reality," he said.

The state's banking commissioner stressed the importance of the public's having "financial literacy."

Speaking to college students in the audience, he said, "Credit (the ability to borrow) is not a right. It's a privilege. Your reputation to a large extent is going to be dictated by your credit standing."

Tennessee's banking commissioner concluded by speaking against a move to require that all banks be federally chartered: a step which he said could be an outcome of the current national crisis.

Declaring his view that Tennessee has done a good job of regulating state-chartered banks, Gonzales said, "I just don't believe that all the regulatory wisdom resides in Washington."