The difference between board members with hands-on banking, compliance and technology knowledge and board members without can mean the difference between a bank's success and failure.
Directors should recognize that appropriate professional behavior reinforced by a sense of belonging to a quality franchise constitutes a decisive competitive advantage.
All mortgage lenders should prepare themselves for a minimum decline in refinance activity of 75% and make sure their capital plan, liquidity plan and budget all reflect this.
Tough regulations, strict oversight and sophisticated analytics can all help, but they pale in comparison to a culture that actively embraces risk management rather than paying lip service to it.
If done right, the Fed's stress tests will motivate a renaissance in enterprise risk assessment, breaking the black box and bringing needed transparency to banks' exposures.
Regulators and governments worldwide have started a grand experiment to organize a bar code-like identifier for financial market participants. But once-innovative financial utilities may prevent this endeavor from succeeding.
Criminal indictments of bank employees indicate a failure in the institution's governance, risk and compliance policies. Boards must take the time to improve their risk management systems.
Directors can stay ahead of the curve by visiting the "factory floor," aligning compensation with compliance and requiring explanations when business management fails to self-identify issues.
