The Queen city's slipping crown.

• Author: Gearino, G.D.
• Position: FINEPRINT

Anyone who has lived in North Carolina longer than, oh, 15 minutes or so knows of the intense sibling rivalry between Charlotte and Raleigh. If cities had family reunions, those two would be at each other's throat before the cover was off the first dish. In my 30 years of newspapering, the most fun I ever had was when the features editors of The Charlotte Observer and Raleigh News & Observer (where I long worked) agreed to send a reporter to the other town for the sole purpose of insulting it. I spent a weekend in Charlotte seeing everything in the worst possible light while the Observe's guy was in Raleigh, and the resulting stories ran side-by-side in each paper on the same day. I always thought I got the best of it--but then again, I had more insult-worthy material to work with. (Bada-bing. Thanks, you've been a great audience.)

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But as I've watched economic events unfold over the past year, even I--with my reflexive disdain for all things Charlotte--have found myself wincing at the indignities suffered by the city's once-proud banking industry. That "new global banking center" thing? Charlotte can forget it. Such dreams were doomed by the combination of bad decision making by homegrown corporate executives and the federal government's ruthless sacrifice of North Carolina's two largest banks to serve the interests of the financial system. Like my retirement portfolio, Charlotte has taken a huge step backward. Sure, it's still home to the country's largest bank, but Charlotte's place in the financial world is nothing close to what civic leaders had in mind as the 21st century arrived and ambitions blossomed.

The role played by local bank executives is well documented and need not be rehashed yet again. Their sins--believing that the housing market's spiral headed only upward and that the securitization of debt somehow made risk go away--were not uniquely their own. Almost everyone in the financial industry has something to atone for. But the role played by regulators and federal officials in the Queen City's diminution is only now coming into focus. They threw one Charlotte bank overboard and (caution: blunt talk ahead) made the other their bitch.

The more time that elapses since September 2008-when Wachovia Corp. effectively ceased to exist--the more peculiar its death sentence seems. As we now know. Wachovia's condition was no more precarious than that of many other institutions (and certainly less precarious than...