BankThink

The Senate will hold a vote to confirm Richard Cordray as director of the Consumer Financial Protection Bureau sometime next week.

A new report from the Bipartisan Policy Center released Tuesday said that "single point of entry" resolutions, a strategy favored by the Federal Deposit Insurance Corp., are a viable option to solve the "too big to fail" problem.

Top Federal Reserve Board officials, including Fed Chairman Ben Bernanke, believe it is best to carry out the current reform process to solve the "too big to fail" issue, but are ready to significantly increase capital standards if the problem persists.

The banking industry must create sustainable mortgage products that will work for responsible families of modest means. We also need a proactive homeownership policy from the federal government.

The heart of the issue is not who holds what titles, but whether a company’s governance processes are functioning as they should.

Receiving Wide Coverage ...Sick of JPMorgan Yet? The Times' "Deal Professor," Steven Davidoff, calls the fight over the upcoming JPMorgan shareholder vote "silly." Though severing the chairman and CEO roles has improved governance at many companies, he writes, "not all companies are alike," and he finds the benefits of the independent-chair model for a large, complex bank dubious. "No study to my knowledge has ever found that companies that do such a split are better at risk management. … Does anyone really think that the JPMorgan board sits with complex spreadsheets looking at the bank's risk positions? Does anyone think it should?" Davidoff doubts an independent chairman would have prevented the London Whale debacle. Echoing colleague Andrew Ross Sorkin's column yesterday, he suggests the vote is more a referendum on chairman and CEO Jamie Dimon, and on big banks, than on corporate governance. … A news article in the Times reports that Dimon has been seeking counsel from Wallace Shawn, er, Lloyd Blankfein, about how to live in the uncomfortable spotlight of Congressional and media scrutiny. … Shareholder support for severing the chairman and CEO roles "is running slightly ahead of the 40% it received last year," the Journal reports, citing an anonymous source. (At Gallup or Zogby?) … Some big shareholders who want Dimon to remain chairman nevertheless plan to vote against re-election of certain directors, the FT reports. Ellen Futter, in particular, is "a lightning rod for corporate governance activists, whose qualifications to serve on the board's risk committee have been questioned." She runs the American Museum of Natural History (cue the dinosaur jokes) and is a former director of AIG who resigned from that board in July 2008, shortly before the government takeover (cue more dinosaur jokes). … The paper also reports that trading revenues in JPMorgan's investment bank are on track to post a double-digit gain this quarter from a year earlier. … We'll give the last word to a Journal reader who commented, "It is remarkable the amount of coverage this story is getting. Don't you guys have anything else to write about?"

A modified version of Ed DeMarco’s securities-based model for housing finance reform could promote an active market for risk-sharing arrangements and further reduce systemic risk by distributing credit risk broadly.

The Federal Reserve Board said that eighteen of the largest U.S. bank holding companies will release partial results of their midyear stress tests to regulators on July 5.

The top GOP lawmaker on the Senate Banking Committee, Sen. Mike Crapo, is requesting more information about the Consumer Financial Protection Bureau's data collection practices, claiming that the agency has been "evasive."

Accept the limitations of quantification exercises. Management should focus on identifying and mitigating risks that alone or in combination could cause a bank to fail.