BankThink

Paradox: Adding Capital Increases Need for More Capital

11/06/13

Banks must generate higher earnings to cover the cost of capital they raise. Higher earnings require taking more risk, creating the need for more capital. There is a better way.

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CFPB Revs Up Auto-Loan Probe; AIG Preps Another Mortgage Suit

11/06/13

Receiving Wide Coverage ... You had to figure that with an election night, and lots of other distractions such as the continued buzz over the SAC Capital plea deal, commercial banks would get a break for at least one 24-hour news cycle. Wrong. Scan the major dailies, and there are threats coming from all directions, including regulatory probes, lawsuits and fines. Even Bitcoin is going to get scrutiny on Capitol Hill. …

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An Easy Fix to Dodd-Frank's Credit Ratings Rule

11/05/13

By deleting three words from the Dodd-Frank Act, regulatory agencies could "refer to" credit ratings, which certainly makes sense, while never "requiring reliance" on them, which doesn’t.

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Sales Territories Are an Endangered Species

11/05/13

Increasingly, our markets will be defined less by where we place branches and more by where we send our best bankers to engage with existing and potential customers.

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Make Debt Buyers Disclose Forward Flow Agreements

11/05/13

Debt buyers should make a copy available to the court and to the defendant at the time of filing the lawsuit. This should help relieve our congested court dockets and prevent lawsuits against the wrong people in the wrong amount.

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SAC Capital's Guilty Plea and $1.8B Fine Not Enough?

11/05/13

Receiving Wide Coverage ...

SAC Brought Down: The papers reported late Monday that hedge-fund group SAC Capital Advisors will plead guilty to insider trading and pay $1.2 billion as part of a decade-long investigation, which included a previous $600 million payment, bringing the total fees to $1.8 billion. Though it was a record fine and high-profile win for U.S. prosecutors, the Journal and the Times focused on how the firm's founder, Steven Cohen, appeared off the...

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It's Too Soon to Charge for Bank Teller Access

11/04/13

Banks should allow more time for less-stringent pricing models and video-teller ATMs to permeate the industry as consumers wean themselves from conventional, face-to-face interaction with tellers.

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Beware When Risks Collide

11/04/13

It’s not enough to manage liquidity risk, credit risk, market risk, reputation risk, regulatory risk, and legal risk. Banks must understand how these risks interact with and affect one another.

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More Big Banks Disclose Forex Probe; Co-op Bank's Radical Restructuring Plan

11/04/13

Receiving Wide Coverage ...

HSBC Discloses Probe During Earnings: HBSC reported a 28% rise in third quarter net profit on Monday largely related to falling loan charges. The bank also became "the latest to admit that it was the subject of an investigation by several authorities into its conduct in the foreign exchange market," Dealbook notes. Per the Journal, "HSBC had not suspended anyone in connection with the probe and ... none of the traders named...

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Fair Isaac's Dominance of Credit Scoring Is a Systemic Risk

11/04/13

No market should over-rely on one entity. But references in regulations and lending guidelines to the dominant credit score provider have created unintentional government brand endorsement and blocked new entrants.

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