BankThink

Banks must generate higher earnings to cover the cost of capital they raise. Higher earnings require taking more risk, creating the need for more capital. There is a better way.

Receiving Wide Coverage ...You had to figure that with an election night, and lots of other distractions such as the continued buzz over the SAC Capital plea deal, commercial banks would get a break for at least one 24-hour news cycle.

The Consumer Financial Protection Bureau continues to investigate several auto lenders for potential fair-lending violations.

By deleting three words from the Dodd-Frank Act, regulatory agencies could "refer to" credit ratings, which certainly makes sense, while never "requiring reliance" on them, which doesn’t.

If ISOs want to stand out in the acquiring industry, they have to bring something valuable to the table — something that will deliver a lasting edge in terms of competitiveness or efficiency.

Increasingly, our markets will be defined less by where we place branches and more by where we send our best bankers to engage with existing and potential customers.

Debt buyers should make a copy available to the court and to the defendant at the time of filing the lawsuit. This should help relieve our congested court dockets and prevent lawsuits against the wrong people in the wrong amount.

Receiving Wide Coverage ...SAC Brought Down: The papers reported late Monday that hedge-fund group SAC Capital Advisors will plead guilty to insider trading and pay $1.2 billion as part of a decade-long investigation, which included a previous $600 million payment, bringing the total fees to $1.8 billion. Though it was a record fine and high-profile win for U.S. prosecutors, the Journal and the Times focused on how the firm's founder, Steven Cohen, appeared off the hook from personal charges. The FT took a more optimistic approach in saying that "a cloud remains over the trading impresario" as investigators are still looking into Cohen's trades, citing sources familiar with the matter. The Washington Post largely credits Preet Bharara, the U.S. attorney for the Southern District of New York, for helping bring SAC to its knees. The Times also looked at the government's "aggressive" tactics that would likely spur other actions against Wall Street firms. Though SAC Capital must close its investment advisory to outside investors, the Journal says several big name banks such as Morgan Stanley and JPMorgan Chase will somehow continue doing business with the "beleaguered firm."

Banks should allow more time for less-stringent pricing models and video-teller ATMs to permeate the industry as consumers wean themselves from conventional, face-to-face interaction with tellers.

It’s not enough to manage liquidity risk, credit risk, market risk, reputation risk, regulatory risk, and legal risk. Banks must understand how these risks interact with and affect one another.