BankThink

Despite a banner year for bank reform, prospective Fed chairman Janet Yellen would have to ensure Basel’s implementation, strengthen Dodd-Frank's living will requirements and form closer ties with regulators to ensure safety and soundness of our banking system.

Receiving Wide Coverage ...Downgraded: Moody's downgraded four major U.S. banks — JPMorgan Chase, Morgan Stanley, Goldman Sachs and Bank of New York Mellon — Thursday, after the rating agency concluded that the government has become less likely to bail out big firms. "The lower credit ratings could raise the cost of capital for the banks, many of which were already downgraded by Moody's following another major review undertaken last year," the FT reports. Wall Street Journal, American Banker

The moment of truth… With the Isis app running and my Serve account displayed on-screen, I held my phone in front of the contactless card reader.

A response to John Bowman.

To set monetary policy and function as a lender of last resort, the Board of Governors must have the expertise to understand the operations and condition of financial institutions.

People without an extensive derivatives background can learn about the nuances of these financial contracts. Massad's law degree, stint as Tarp adviser and global professional experience will help him achieve the CFTC's mission of derivatives reform.

Receiving Wide Coverage ...Oh, JPM: JPMorgan Chase has officially cancelled its terrible idea/Twitter takeover with vice chairman Jimmy Lee after the open invitation to #AskJPM questions on the social media site backfired. Profusely. ("Right when the engagement numbers were through the roof?!" tweeted Forbes' Alex Konrad in response to the cancellation.) "The original idea — which had been kicked around the firm over the last few weeks … was to come up with an out-of-the-box way to use social media," anonymice tell Dealbook. "The target audience was students, with Mr. Lee expected to focus on career advice." Instead, the bank was bombarded with questions about foreclosures, religion and Jamie Dimon's pet preferences, among other, oft-NSFW things on Wednesday. "JPMorgan's misstep is the latest example of how marketing on social media can go wrong," the FT explains in what is, perhaps, an understatement. "As companies from banks to supermarkets embrace the medium as an effective way of building strong relationships with customers, many are finding it tricky to keep control of the conversation." Dealbook notes that no one is expected to lose their job over the kerfuffle. The failed Twitter experiment isn't the only negative press for JPM this morning, demonstrating exactly how bad of an idea it really was. The Journal updates the status of JPM's now possibly defunct billion-dollar settlement with the DOJ over mortgage-backed securities. "No announcement yet," executive Michael Cavanagh said during a banking conference, though the bank does have "a desire to move forward." (Does Eric Holder take one lump or two? #AskJPM," tweeted financial columnist James Saft.) And Dealbook's got some new details on JPM's "fruitful ties" to China's elite (the subject of another government probe into the bank) after reviewing confidential documents and interviewing anonymice. The article reveals that JPM contracted Wen Ruchun, "the only daughter of Wen Jiabao, who at the time was China's prime minister, with oversight of the economy and its financial institutions" for $75,000 a month. (Are you involved in a massive corruption scandal in China? #AskJPM," tweeted Slate blogger Matt Yglesias with a link to the Dealbook article.)

To avoid incurring a customer's wrath or a lawsuit, banks should make sure new fees carry a clear value exchange, offer something new (ahem, mobile) and are easily avoided. Resist any temptation to set fee traps.

The Consumer Financial Protection Bureau plans to hold a field hearing Thursday on the concerns about how the agency is regulating indirect auto lenders.

In its next round of stress tests, the Federal Reserve revisits conditions similar to those of the Great Recession. But booms are far more dangerous for bank stability than recessions, since the seeds of failure are invariably sown during them.