BankThink

The first thing President Obama should have done after Larry Summers’ withdrawal was nominate Janet Yellen to be Fed chairman. Appointing the first woman to lead the Fed should be a historic moment. Obama has turned it into a consolation prize.

Incessant lawsuits and enforcement actions convert a taxpayer problem into a shareholder concern, immune to lobbying efforts. The surge will lead to restructuring efforts, including spinoffs, as managers seek to simplify operations and improve performance.

Widespread adoption of same-day settlement will level the competitive playing field for all financial institutions and allow all account holders to benefit from expedited settlement.

Receiving Wide Coverage ...'Whale' Settlement: Anonymice are telling their favorite news outlets that JPMorgan Chase is nearing an about $750 million to $800 million settlement with U.S. and U.K. regulators related to last year's pesky $6 billion "London Whale" trading loss. In a big win for the Securities and Exchange Commission, the civil settlement, which could be announced as early as this week, is expected to include an admission of wrongdoing. This admission, part of the SEC's harder stance on enforcement actions, "could open the bank to additional legal liability from shareholder suits, although securities lawyers said the bar is high to prove the bank intentionally misled investors," the Journal notes. Spokespersons for the bank and regulators, which also include the Office of the Comptroller of the Currency, the Federal Reserve and the U.K. Financial Conduct Authority, have yet to formally comment on the forthcoming settlement. Anonymice are billing the move as part of JPM's efforts to repair its frayed relationships with regulators, calm upheaval at the bank and finally put the trading loss behind it, but the new settlement may not be the last time the bank has to deal with the undead "Whale." "The Commodity Futures Trading Commission, the regulator overseeing the market in which the losses occurred, has balked at joining the broader settlement and plans to fine the bank later this year," unnamed sources tell Dealbook. The settlement also won't mark the end of the megabank's regulatory woes, given all the probes that are still pending. "As a result of these cases, [JPM] said it anticipates $6.8 billion in future legal costs in excess of the money it has already set aside to handle litigation," the Washington Post notes.

Many regulators and pundits overlook the distinct difference between responsible lenders who offer a safe, reliable loan product, and unscrupulous lenders who commit fraudulent acts and scam consumers.

Policy reform efforts will fall short until bankers at the largest institutions stop worshiping complexity, prioritize service and long-term relationships, and encourage employees to pipe up rather than hide problems.

Having one risk expert on the board’s risk committee is better than none, but a bit like having a general physician in an operating room when a heart surgeon, oncologist or anesthesiologist is needed.

Gen Y'ers are actually not all that different from previous generations when it comes to financial services. They like the touch and feel of the real world.

Frank Diekmann takes a look at the perpetual chase after young customers, and finds perspective is much needed.

Expanding the NCUA Board from three to five members and reserving one of those seats for a person with state supervisory experience will help establish a more promising future for the credit union movement.