BankThink

It is time to put an end to the misuse of companies to evade taxes and advance criminal purposes.

The Corker-Warner bill would require private investors to take 10% of losses before federal mortgage guarantees kick in. More research is needed to determine whether that’s enough protection for taxpayers.

Receiving Wide Coverage ...U.K.'S Capital Needs: British regulators have told their biggest banks to raise a combined $20.7 billion in capital by the end of the year to cover shortfalls. The announcement builds on earlier capital directives from the Prudential Regulation Authority, which has been attempting to bolster banks' balance sheets in an effort to stem off future financial shocks. Barclays, Royal Bank of Scotland and Lloyds Banking Group, which would need to raise the bulk of the $20.7 billion, told the Journal they "would sell assets and shrink parts of their businesses to address the shortfalls, and won't need to issue new shares." In other U.K. banking news, Chancellor of the Exchequer George Osborne said he would consider a proposal to split RBS into "good" and "bad" banks in order to deal with toxic loans. He also hinted that the U.K.'s stake in Lloyds was now being prepared for a sale. New York Times, Financial Times

During a House Financial Services subcommittee hearing, Republicans accused the Consumer Financial Protection Bureau of overspending, saying too much money is spent on top officials' salaries, travel and planned office renovations.

Contradictory regulations, such as the CFPB's QM standards and HUD's new fair lending rules, inhibit banks’ ability to devote resources to their businesses.

Receiving Wide Coverage ...Consultant Crackdown: Deloitte Financial Advisory Services has struck an agreement with New York's Department of Financial Services that will see the advisory firm pay $10 million and receive a one-year ban from soliciting new work in the state in order to settle allegations it mishandled its anti-money laundering review of U.K. bank Standard Chartered. The agreement, which also requires Deloitte "to implement reforms designed to address conflicts of interest," is part of DFS leader Benjamin Lawsky's "unparalleled crackdown on independent consulting firms." According to the FT, Lawsky used an obscure state banking law "to revoke consultants' access to confidential supervisory information if the access does not 'serve the ends of justice and the public advantage.'" In a statement, New York Governor Andrew Cuomo said the move against Deloitte was laying the groundwork for broader change in the financial services consulting industry. However, there's no real consensus yet on whether other states or federal authorities will follow Lawsky's lead or if it's time to dust off his old nickname. While he was taking action against Deloitte, Dealbook notes, the Federal Reserve was ordering a large regional bank to hire a consulting firm to go through high-risk customer accounts. "It is unclear whether actions by state regulators like Mr. Lawsky — who has a history of irking his federal counterparts by running ahead of them — portend an overhaul of the consulting industry or a coming clash of state and federal banking regulators," the article (semi-)concludes.

In the S&L crisis, regulators manipulated capital to prop up ailing thrifts. Today, regulators embrace risk-based requirements assuming they can correctly predict the future.

Many Bitcoin startups face the expensive and daunting task of obtaining multiple state money transmitter licenses. But these businesses could drum up enough support to create a more streamlined and affordable licensing process.

Even great bankers cannot succeed when forced to compete in a market with an influx of new banks and a shortage of skilled bankers, wise directors, and experienced regulators.

The Federal Deposit Insurance Corp. announced that James Wigand will step down from his management post of the agency's new wind-down facility for systemically important companies on July 28. In 2010, Wigand began overseeing the agency's implementation of the new resolution powers under the Dodd-Frank Act.