Andrew Kahr

Identify the megabanks' overpriced products and services, the customers they can't or won't serve. Use outside infrastructure to adapt quickly. B of A, Citi and other financial services oligopolists are highly vulnerable to competition.

Yes, an effective sales organization awakens customers to newly perceived needs. But it also markets the products that yield the highest return—not necessarily the ones customers would most want to buy.

If you want to avoid catastrophic outcomes, don't rely on stress test models with hundreds of variables. Focus on finding the small number of factors that could individually precipitate failure.

History shows banks can't compete with agents selling consumers insurance. But credit protection products have been highly profitable for the banks, and can remain so – provided the products are reformed.

Make sure each of your bank's initiatives is explicitly designed to eliminate uncertainties as rapidly as possible so any failures are small, quick and survivable rather than interminable and deadly.

Bankers say their decisions and progress are retarded by uncertainty about pending government actions. That's nonsense. Seldom has the future been as clear as it is today.

Sustainable growth requires banks to increase revenue steadily. We've seen we can't achieve this just by raising prices and by charging for what used to be free.

In the past, bank investment aimed at gaining a proprietary edge through new methods of consumer payment has consistently been poorly rewarded. Expect another repeat.

Innovations can fail catastrophically, as was the case for the mortgage and securitization innovations that precipitated the crisis. Valuable innovation profitably and honestly delivers greater perceived value to customers, without incurring disproportionate cost and risk.

Banks often choose not to bring questions about products, terms and marketing to regulators, citing fear of retribution from front-line examiners. Creation of the CFPB separates consumer policymaking from examination activities, offering hope for open, clear communication.

Taxpayers should not be paying to increase homeownership or to boost home prices. With interest rates low, lenders can charge for risk and homeowners can pay for it.

Instead of pushing to avoid risk retention or liability for future frauds, banks that want to originate and sell mortgages should focus on containing and rolling back the disparate impact doctrine, which seems sure to savage them.

Sheila Bair says we should prohibit examiners from quitting to work in the private sector, to keep them from gaining unjustly favorable regulatory treatment for the banks that later employ them. But the worse abuse runs the opposite way.

Complex rules can be bent to special interests, and invite gaming and unfairness. An example is the exclusion of credit cards that don't impose "finance charges" from a great many requirements.

Banking powers, specifically the power to accept demand deposits, should be limited by Congress to institutions qualifying for federal deposit insurance. Otherwise we face uncontrolled systemic risk from inconsistently regulated entities.

If your bank is gung-ho to issue prepaid cards, think again. Focus on how to retain checking account customers, rather than emulating Green Dot and Chase and issuing fee-based "prepaid cards" as a new (already outdated) product.

Most customers want to spend less time on their finances, not more. They will flock where they are rewarded for transacting conveniently, rather than for counting their pennies through PFM.

Trader fraud occurs only because we do not require immediate trade confirmation posted infallibly to the institution's books. Instead, the trader is allowed to wave a magic wand to create false transactions or hide real ones.

Fanatical insistence on lending to risky borrowers to get them to buy more houses destroyed trillions of dollars. Now there's pressure to make even riskier, unsecured loans to these consumers. A freer, fairer market would do better.

"No financial institution's collapse could sink our economy"? Funny. "To accord nonbanks parity with banks, just regulate nonbanks more strictly"? Hilarious. But here's a real howler: "We have to go on subsidizing home building and financing."