Joe Adler

Washington insiders were momentarily shocked last week when it appeared that President Obama had withdrawn his nomination of former Federal Reserve Bank of Kansas City Chief Thomas Hoenig for vice chairman of the Federal Deposit Insurance Corp.

The FDIC tries to stay clear of being the agency that closes a bank's doors. But working behind the scenes to guard its insurance fund, the agency is often significantly involved in the decision of when to fail an institution.

Receiving Wide Coverage ...Bailout Redux: While the European bailout plan "set off celebrations" in markets throughout the world, many analysts warned that the plan "remains a work in progress," the Post reported. "Key details are uncertain, they say, and a slowing European economy could throw the program off course." The Journal, like a lot of other media, went full tilt on the European bailout agreement even though - or maybe because - a lot of folks are skeptical it will hold up. Yes, Americans are happy everywhere that their 401(k)s shot up with the market Thursday, but it could take "weeks" for negotiators in Europe to tell us the details of (and to figure out themselves) what they have wrought, the Journal said. Not promising was the warning by a European Central Bank official that the deal's "leverage instruments are similar to those which were among the origins of the crisis, because they temporarily masked the risks." The deal relies on "Byzantine financial engineering," another Journal story said. (A note to Scan's Greek friends: that's not a compliment.) A big push is expected. European officials are going to have to sell sovereign markets on the plan, as sovereign bond markets and others reacted cautiously. Some say the European banks got off too easy, yet others speculated the plan might work despite initial shortcomings if it boosts confidence. The Times said German Chancellor Angela Merkel called bankers' bluff, telling them to take the offer on the table of a 50% write-down in the face value of their Greek bond holdings, or bear the consequences of a default. She was willing to risk a credit event that would have thrown world markets into turmoil, and if that happened, she would blame the banks. Critics say the plan may not deliver as much relief to Greece as promised, and that it may not be sufficient to help troubled banks. "It's another patchwork effort," said Richard Cookson, global chief investment officer of Citi Private Bank. The FT looked at China's role in the rescue, and its demands that other countries be involved and its investment be guaranteed. The article quotes French President Nicolas Sarkozy: "Why would we not accept that the Chinese had confidence in the eurozone and place a part of their surpluses in our funds or our banks. Would you rather they placed it with the US?" Ouch!

Fred Joseph, Colorado's banking commissioner, said Community Banks of Colorado should have been able to sell its branches in a bid for more time to resolve its problems. But the FDIC and the Fed overruled him — and then failed the bank.

The Federal Reserve usurps authority usually held by state regulators and fails a Colorado bank.

Two community banks in Georgia, and one in Florida, were closed late Friday at a cost of more than $130 million to the Federal Deposit Insurance Corp.

The Federal Deposit Insurance Corp. announced on Oct. 18 that Craig Jarvill has become the director of the agency's Division of Finance.

Even though his nomination to head the Consumer Financial Protection Bureau sits in limbo, some of the work Richard Cordray did as Ohio's attorney general is coming to resolution. Yet the outcome is probably not to his liking.

Former Kansas City Fed president will likely let his disapproval about Dodd-Frank policies be known, but his views on bank examinations and TBTF seem in line with FDIC thinking.

Thomas Hoenig, outspoken during his time at the Kansas City Federal Reserve Bank, would become the FDIC's No. 2 during implementation of a new resolution system.

State attorneys general said issues around the bureau's leadership structure should not stop White House nominee from getting director's job.

Republicans are pushing for the Consumer Financial Protection Bureau to be run by a board of Senate-confirmed appointees instead of a single director, but some question if it would have much impact.

The Securities and Exchange Commission unanimously issued a proposal Wednesday for implementing the so-called Volcker Rule.

Despite the drop in failure predictions, officials warn that the condition of the economy remains uncertain and give no signs of premium reductions.

Two failures late Friday - one in Minnesota and one in Missouri = cost the Deposit Insurance Fund nearly $190 million.

As agencies face the daunting task of finalizing their much-criticized rule, there is growing speculation that regulators will need to re-propose their proposal.

Early reviews of the draft plan implementing the proprietary trading ban and hedge fund investment limits have industry representatives concerned it is too long and complicated.

According to a Sept. 30 internal regulatory memo, regulators plan to broadly define proprietary trading, provide limited exceptions to allow banks to invest in hedge and private-equity funds, and require institutions to install new internal controls.

The FDIC, one of five agencies implementing the proprietary-trading ban, will meet publicly Tuesday to discuss new regulation.

Kevin MacMillan has moved from the government-relations shop at Bank of America Corp. to that of U.S. Bancorp.