BankThink

Despite opposition by the White House and Democrats, the House panel passed several derivatives bills that would modify provisions of the 2010 Dodd-Frank Act.

Bankers and regulators may need to study the barriers of entry into banking just as seriously as the NFL and Major League Baseball consider new franchises for football and baseball.

Regulators can use the power of Big Data mining and pattern-matching algorithms to seek out triggers of contagion across an interconnected financial system.

Receiving Wide Coverage ...Royal Goodbye: Royal Bank of Scotland is pushing out its chief executive, Stephen Hester, and cutting about 2,000 jobs as the bank's board tries to get ready to wean itself off the British government's 81% ownership stake. Hester has recently "clashed with [RBS Chairman Philip] Hampton and senior government officials over the bank's strategy," anonymous sources tell the Wall Street Journal. Hester is the sixth British big-bank CEO to get the ax since the financial crisis, the Journal notes, and consensus is that he's the least deserving. RBS shares fell 6% after the announcement. Lex says "shareholders have a lot to thank" him for, while Reuters' Felix Salmon noted an unusual outpouring of Twitter sympathy for Hester.

In addition to addressing the risks that caused the last crisis, the Financial Stability Oversight Council should be comparing notes about cyber threats with the national security agencies.

The nation's seven largest banks have earned an extension to push out their swap activities as required by the Dodd-Frank reform law by the Office of the Comptroller of the Currency.

Law professor Saule T. Omarova is suggesting regulators require pre-market approval for complex financial instruments like derivatives to curb systemic risk in global markets. How effective would such a program be?

Receiving Wide Coverage ...Dodd-Frank's Swap Trading Transition: The Office of the Comptroller of the Currency has sent letters to some of America's biggest banks granting them a two-year transition period to comply with a Dodd-Frank requirement that could curtail swap trading, Reuters reports. The rule, the wire service says, "attempts to keep certain risky trading activity out of entities that receive government backstops, such as deposit insurance or access to the Federal Reserve's discount window." The Wall Street Journal quoted Kenneth E. Bentsen Jr., president of the Securities Industry and Financial Markets Association, saying: "The action from the OCC gives them clarity on what they need to do, and when they need to take action, to restructure this part of their businesses." New York Times, Wall Street Journal

The Fed’s research raises more questions than it answers, among them: Is the researcher right when he says the great bankers he interviewed could run a bank successfully anywhere, anytime?

Banks are incessantly lobbying the CFTC to hold off on cross-border derivatives rules until other countries write their own regulations. But that could take longer than the next crisis.