BankThink

A recap of the informed opinions (and the discussions they generated) on BankThink this week, including the downside of public banking and the vulnerabilities unaddressed by global regulators' bail-in plan for megabanks.

Receiving Wide Coverage ...

Taking Stock of the Stress Tests: All 31 banks subject to the Federal Reserve's stress tests had enough capital to survive the central bank's crisis scenario, but many in the media say this may not be the most reliable indicator of how banks would manage in a real recession. The problem is it's hard to predict what a crisis will actually look like, Stanford finance and economics professor Anat Admati tells the...

When the government owns banks, lending decisions tend to be driven by politics rather than economics. Resources flow to those with influence and banks under-price risk in order to appeal to voters. That's bad news for everyone.

A recent CFPB enforcement action shows that lenders must not only avoid misleading statements, but anything in connection with their advertising that may have the likelihood of significantly confusing consumers.

Wall Street Journal

Is this the first wave of backlash to Apple Pay? Or was it simply to be expected that it was only a matter of time before hackers cracked the Apple Pay code? Either way, some banks say they've seen an increasing amount of fraud on Apple Pay devices. The weakness in the system is apparently related to the verification process associated with a user adding a credit card to the service, unnamed sources...