BankThink

The central bank is too big, too leveraged, extremely short-funded and a frequent creator through its interest rate and money-printing actions of gigantic systemic risk.

The bill would replace the misleading risk-based capital system with a straightforward way to determine the true health of an institution, in addition to providing incentives for the largest banks to downsize.

Receiving Wide Coverage ...More JPMeeting Previews: JPMorgan's annual meeting is a week from today, and the curtain-raisers keep coming. "Shareholders are taking a close look at financial relationships between some J.P. Morgan Chase board members and the company they oversee," according to the Journal. For example, the bank underwrote a bond issue, provided a line of credit and made charitable contributions to the American Museum of Natural History, run by Ellen Futter, a JPMorgan director. ("J.P. Morgan won the bond issuance as the result of a competitive bid, and the bank provided financing for the museum before Ms. Futter joined the bank's board, said a person close to J.P. Morgan," who must be a brave whistleblower risking his or her job to let the world know that the bank did nothing wrong.) Notably, the shareholders scrutinizing these conflicts are union pension funds, a category that chairman and CEO Jamie Dimon recently scoffed at as distinct from "real money" investors. Meanwhile, media baron Barry Diller tells Times columnist Andrew Ross Sorkin that the push to sever the chairman and CEO roles at JPMorgan "isn't about good governance; it's about busybodies … shaming a superb C.E.O." Sorkin writes that "the question before shareholders has moved beyond simply a philosophical debate about whether corporations should have a separate chairman and chief executive. The vote increasingly appears to have become a referendum on Mr. Dimon personally." On that score, the columnist reminds readers: "the incontrovertible fact remains that JPMorgan is still one of the best-performing banks on Wall Street under Mr. Dimon." The CEO is likely to quit "if he receives the equivalent of a no-confidence vote. Plus, there is no clear successor waiting in the wings." (A Times reader asks in the comment thread, "whose fault is it that 'there is no clear successor waiting in the wings?'") Interestingly, Ira Millstein, a corporate governance lawyer and prominent supporter of the independent-chairman model, acknowledges to Sorkin that "one size may not necessarily fit all." Hank Paulson's quoted in there stumping for Jamie, too.

It’s important that models for stress-testing be capable of representing the nuances of the questions they are asked to answer. Insights would be lost if models are kept too simple.

Financial journalists sometimes refer to M&A bankers as "rainmakers." Do they make it rain, or do they just take credit when it starts raining?

Bankers truly face a Catch-22 in the lending business these days, thanks to "qualified mortgage" and disparate impact laws.

Receiving Wide Coverage ...Doormat Directors: With little more than a week to go before JPMorgan's annual meeting, some shareholders are wondering whether Lee Raymond, the board's lead director, "has been an effective counterbalance" to chairman and CEO Jamie Dimon, the Times reports. If they conclude that Raymond, a former CEO of Exxon-Mobil, has been too lax in his oversight of the bank's management, these shareholders may vote to split the chairman and CEO roles. In her weekly column, Gretchen Morgenson takes a broad look at the ways in which "directors of public companies often let down their outside shareholders" in areas such as succession planning and pay for performance.

There aren't that many people who can get attendees at credit union conferences to put down their tablets and phones for a couple of moments. But Eric LeGrand can.

Greg Fine, a principal of Ding Communications, Inc., explains what is wrong with banks is not a good "what's right with credit unions" message.

John Potok, Product and Business Manager, Loyalty Solutions at Fiserv, explains why and how to build and effective card loyalty program.