The dustbin of bank history is filled with spectacular failures. Consider a representative short list: The developing-country debt crisis. The energy-sector collapse. The commercial real estate debacle. The Asian-markets implosion. All were the result of suspending good judgment and chasing after the latest "can't miss" opportunity.

Each of these opportunities had been viewed by bankers as nothing short of a modern miracle. Sovereign nations were said never to default; oil prices were going to $60 a barrel; every building project's cash-flow forecast was three times the debt service; and Asia would sustain 12% economic growth indefinitely. They represented some of the best returns ever - right up to the second they crashed and burned.

In hindsight, it was obviously silly for us to have believed the outrageous forecasts of the time. And so it is with today's miracle - the Internet and its various Web-banking progeny. The parallels between this modern-day economic wonder and those of the past are undeniable, and alarming.

The underlying premise is exactly the same: It's OK to suspend common sense and override experience because "it is different this time." Well, it isn't different. In fact, it is all too similar.

The similarities start with aggressive projections for demand and growth that simply can't be validated. A new survey appears almost daily predicting more and more users of every new Internet service offering, no matter how ridiculous the business model.

These projections will prove to be just as erroneous as $60-a-barrel oil or endless economic growth in Asia, regardless of the "logic" proffered by the accompanying company press release, analyst report, and media account.

The second similarity is the near-hysteria to get in on the latest sure-bet deal. For individuals, it is the mad rush to join an Internet start-up for a payoff from the initial public offering. For corporations, and for far too many bankers, it is the Hollywood appeal to play the part of venture capitalist for that same big payoff.

Today's "gold rush" fever has manifested itself many times in the past. Encouraged by a few highly visible early reports of success, everyone tosses reason aside and rushes to join the gang that is going to make a quick buck.

Rational behavior in energy-sector lending disappeared when many bankers, emboldened by apparent early successes, ran off to Oklahoma City to lend money to and through Penn Square Bank. Common sense in commercial real estate lending went on hiatus when federal regulators decided to let thrifts directly partner with developers - a decision akin to letting sheep partner with wolves.

The final link between the Internet and past wild-eyed excess? Fast talk, loose controls, and failed audits. We have already seen a few dot-coms blow through hundreds of million of dollars before sinking into bankruptcy.

Folks, this is just the tip of the iceberg. These dead-on-arrival firms, armed with stockholders' money yet unwilling to discipline themselves managerially and financially, and unable to resist the trappings of success, look not a bit different from Third World politicians misapplying loans made to their governments.

Encouraged by Internet "success" stories like Amazon.com (the fast-talking and faster-spending hero of the New Economy), some of us have been lulled into believing that losing money is some sort of red badge of courage. So immune have bankers become to this chronic condition that we continue to do business with Internet banking vendors that are manifestly unprofitable.

Apparently the suspect financial viability of such firms, not to mention the implication of their inability to support their products and services over time, bothers no one. It should.

Even e-business companies that report profits have become suspect. Consider MicroStrategy, a vendor of electronic customer relationship management tools that just wiped out two years of reported profit (and 90% of its stock price) by restating revenue.

Such admissions are so common that one wonders whether we can believe anything that is reported. It is almost amusing that America Online, the oft-cited example of Internet profitability, as recently as 1997 restated years of reported earnings, turning them into losses in the blink of an eye.

It is never too late to step back and reassess a business decision. Now might just be the right time to rethink the long-term value of Internet investments and the commitment of scarce management and technology resources to these "can't miss" opportunities.

At the very least, we ought to understand the vested interests of the dot-coms, Internet banking companies, and bankers-as-venture-capitalists pushing the industry to sink more and more money into what may well amount to nothing more than the latest fiasco-in-the-making.

We should complete the assessment quickly, before the latest sure thing ends up in the dustbin of history with the rest of the industry's debacles.

Mr. McGrath is managing partner of Bank Earnings International LLP, a consulting firm in Orange, Va.

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