BankThink

Insurance Needs a Federal Regulator - But Not the Fed

10/25/13

A dedicated federal insurance regulator would understand the risks of the insurance business – which are fundamentally different from those in banking – while monitoring systemic dangers posed by the largest insurers.

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Fed Unveils Tough Liquidity Rules; Refinancing Slump Leads to B of A Job Cuts

10/25/13

Receiving Wide Coverage ...

Unveiled: The Federal Reserve proposed stricter liquidity rules for the biggest U.S. banks on Thursday. (American Banker's Donna Borak breaks down the proposal's specifics here.) The Journal notes the proposed rules, which will be open for public comment for 90 days and would go into full effect in 2017, are "unlikely to cause major changes at U.S. banks, which have largely improved their funding positions since the 2008 financial crisis." But the...

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Why Big Banks May Be at an Annual $14 Billion Disadvantage

10/24/13

Bloomberg estimates big banks receive an $83 billion taxpayer ‘subsidy’ a year. But calculating bank funding levels at normal, as opposed to crisis times, and accounting for Dodd-Frank compliance costs yields a very different estimate.

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Countrywide Buyer's Remorse Rolls On, as Do Hits to JPM

10/24/13

Receiving Wide Coverage ... Bank of America Found Liable: The verdict of a New York jury Wednesday holding Bank of America liable for alleged mortgage misdeeds at Countrywide may go down as an important turning point in the federal government's belated push for financial crisis accountability. The major papers list several reasons why this civil trial matters: it marks the first time a bank has been held liable for fraud in connection with the mortgage boom;…

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Banks that Lobby More Likely to Get Emergency Loans from the Fed

10/24/13

Politically connected firms might simply be more willing to participate in government-sponsored programs. Or, perhaps more disturbingly, banks might view their political connections as an insurance policy, which may encourage more reckless or risky behavior.

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Calculate Cost of Equity to Truly Measure a Bank's Performance

10/23/13

Using return on equity as a performance measure without a risk adjustment is like trying to fly a plane without an altimeter. Sooner or later you will hit something.

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ECB Wants 8% Capital Buffer from Banks

10/23/13

Receiving Wide Coverage ...

ECB Inspections Start in November: The European Central Bank said Wednesday that it will begin a thorough review in November of the balance sheets of around 130 financial institutions from Latvia to Germany. Some news outlets are calling this a "bad loan" test. The goal is to remove doubts about the strength of European banks in the wake of the European recession. Along with stress tests, the central bank is also requiring...

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How Big Banks Can Go Beyond 'Satisfactory' Regulatory Ratings

10/23/13

Comptroller Thomas Curry’s 'heightened expectations' for large banks should include whether our communities are substantially better off as a result of their presence.

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Long-Term Viability in Mortgage Market Hinges on Reps-and-Warrants Overhaul

10/22/13

Lenders will be exposed to material put-back risk unless steps are taken to set industry standards for loan origination and processing.

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All Federal Mortgage Lenders Should Follow New GSE Quality Controls

10/22/13

Fannie Mae and Freddie Mac have tightened their ‘representation and warranty’ framework. Other public sector mortgage funders, including FHA, VA, and the USDA should follow suit … or risk being left with lemons.

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