Politicians who blindly supported restrictive AML guidelines now proclaim disgust as a global bank severs relationships with firms that send money to Somalia. But Barclays is merely exercising understandable caution.
Even free-marketeers must recognize initial conditions. The markets we have today are set up to invest in government-guaranteed mortgage-backed securities. To remove the guarantee without crippling damage would take decades.
Until banks' RWA disclosures improve and become more uniform globally, capital ratios will remain a mystery to many journalists, investors, banks and even some supervisors.
Securing an economically and fiscally sensible approach to housing finance reform is taking a backseat to entrenched political views on both sides of the aisle.
Two new bills in Congress would undermine Dodd-Franks ability-to-repay rule and recreate incentives for lenders to steer families into high-risk, high-fee loans they do not understand and cannot afford.
The new leverage ratio is a relatively modest proposal that can be easily addressed by the affected banks without material capital raises or changes in distribution policy.
An encompassing denominator and full disclosure requirements should assuage concerns that Basel fails to go far enough to cushion banks for unexpected losses.
A bipartisan commission, in lieu of a director, would encourage internal deliberation and constrain the CFPBs ability to make politically-motivated or ill-informed decisions.
