BankThink

The Commodity Futures Trading Commission, the Federal Reserve Board and the Federal Deposit Insurance Corp. all announced plans to hold public board meetings on Dec. 10 to vote on a final Volcker Rule.

In the end, we will once again have a system that looks suspiciously like Fannie Mae and Freddie Mac redux, with a housing bubble, a mortgage meltdown and a financial crisis.

Most systemically important financial institutions are publicly traded, so they’d have to immediately disclose any orders from the Fed to curb systemic risk. Their securities would get hammered. Thus, Fed supervision is a strong incentive to operate safely.

A Volcker Rule limiting investment in securities used primarily for customer transactions to 10% of the firm’s revenue is simple for banks to understand and easy for regulators to enforce.

Receiving Wide Coverage ...Settled: Bank of America has agreed to pay $404 million to Freddie Mac to settle disputes over residential mortgage loans sold to Freddie between 2000 and 2009. Some good news for the bank? "The deal should largely shield Bank of America from any further 'put-backs' of crisis-era loans sold" to both government-sponsored enterprises, notes the Journal. B of A already agreed to a $1.28 billion repurchase settlement with Freddie back in 2011. (That settlement, however, covered loans sold by Countrywide.) It also already settled twice with Fannie Mae. The bank plans to use existing reserves to cover the latest payout. Freddie previously struck similar deals with Citigroup, Wells Fargo, JPMorgan Chase and SunTrust Bank.

Passing framework rules without considering technology implementation has proven disastrous for the CFTC. Like the Obamacare website debacle, it has brought to the fore unresolved Big Data issues.

It's been nearly two years since the FDIC first unveiled its so-called “single point of entry” approach, which is designed to help unwind a systemically important financial institution. Yet without more details, the strategy is in danger of imploding.

Bank M&A activity has been lackluster in most parts of the country. It will probably stay that way, since so many banks are too small for buyers to bother with.

Receiving Wide Coverage ...UBS' Restructuring Efforts: An internal memo reviewed by the New York Times revealed UBS' plan to combine its currency, interest rates and credit trading businesses into a single unit. The move, confirmed by the bank, is part of UBS' ongoing efforts to "to shrink its investment bank and shift focus away from riskier trading activities to its wealth management and retail operations," Dealbook notes. The bank also plans to buy back bonds to cut borrowing costs and shrink its balance sheet ahead of ahead of more stringent Basel capital rules, the FT reports.

In a Nov 13, a piece on CUJournal.com, entitled "Credit Unions Beat Banks In Loan Growth, Exec Pay And More," cited a study from Enetrix that claims that the median base salary of credit union CEOs is higher than the salary of bank CEOs of comparable size - this is very misleading.