BankThink

Receiving Wide Coverage ...SEC's New Enforcer: Chairman Mary Jo White is set to appoint long-time colleague Andrew Ceresney as co-head of the Securities and Exchange Commission's enforcement unit pretty much any day now. Ceresney, who served with White while she was U.S. Attorney for the Southern District of New York and at law firm Debevoise & Plimpton LLP, will share the role with interim enforcement chief George Canellos. Dealbook calls the joint leadership "unusual, if not unprecedented," but also reports it will be temporary. Anonymous sources tell the website Canellos "is expected to return to private practice well before the end of President Obama's second term." The Journal says Ceresney's "appointment will add to the conflict-of-interest headaches at the federal agency," though it also notes such "conflicts aren't unusual." (Recall, White's own former client list includes JPMorgan Chase, Deloitte & Touche, General Electric, Verizon Communications and former Bank of America chief executive Kenneth Lewis.) According to the paper, one of the issues Ceresney and White will have to address involves "whether to change the specialized enforcement units" set up by predecessor Robert Khuzami.

The Consumer Financial Protection Bureau, created under the 2010 Dodd-Frank Act, reports that there are more than fifty different "senior designations" that financial advisors are using to bring in older consumers into the business.

Computers, as fast that they may be, fail to provide depositors with the same quality service as the NCR 2000.

Receiving Wide Coverage ...Who Needs Volcker?: The verdict is in on Morgan Stanley's (MS) weak first quarter, and it's a rousing thumbs down. The Wall Street giant's shares fell 5.4% Thursday after it reported disappointing results and a sharp drop in trading activity. Bond-trading revenue fell 42% and stock-trading revenue 19%, according to the company. The news arrived at a time when Wall Street is supposed to be shifting away from risky trading. That's the theory, anyway. Among all financial firms that have reported first quarter results, revenues were up smartly for trading (41%) and investment-banking (43%), while there was a contraction in the core commercial-banking activities of deposit-taking (-26%) and lending (-1.5%), according to the Wall Street Journal. Morgan Stanley—whose Chief Executive James Gorman actually is seeking to play down trading and play up wealth management—appears to be stuck somewhere in the middle. It's "like a team changing sports, and the sport they are leaving didn't do so well, but the one they are going to did," Chris Grisanti, the owner and co-founder of Grisanti Capital Management (and an owner of Morgan Stanley shares) told the New York Times. "However, I think now there is some doubt in the market about their ability to make this transition." On the bright side, Gorman's wealth management push showed progress. Morgan Stanley's wealth management unit posted pretax income from continuing operations of $597 million, up 48% year-on-year. The money management business is one where the company will be joining a crowded field of players. Virtually the entire Street has concluded that docking clients for fees like clockwork is a more sustainable business model in today's environment than running a casino in the hope that someone other than regulators shows up. Richard Bove, the outspoken bank analyst now with Rafferty Capital Markets, interpreted Morgan Stanley's results and the market's reaction as reflective of broader doubts about Gorman's grand strategy. "Most investors are unhappy with the fact this company was not able to grow its trading activity as much as its peers and as a result they perceive there is a significant problem at the company," he said. Especially galling, perhaps, is that Citigroup—a brokerage joint venture partner that Morgan Stanley is in the midst of buying out—posted surprisingly strong Q1 results on the back of bond trading and investment banking. New York Times, Wall Street Journal, Bloomberg

Spending several million dollars to beef up risk management processes would be an easy decision if it saved hundreds of millions in deposit assessments each year. Also, Camels should become Carmels.

Federal Reserve Board Gov. Jeremy Stein said regulators should not abandon the current reform agenda designed to eliminate "too big to fail."

Steve Antonakes, the Consumer Financial Protection Bureau's Acting No.2, reassured executives at the American Bankers Association's government relations summit over the impending mortgage rules and the examinations that will follow.

The narrative favored by politicians, regulators and bureaucrats is that private banks caused the financial crisis of 2008. The Federal Reserve Chairman and Treasury Secretary stopped the market panic and a repeat of the Great Depression, then politicians and regulators implemented a plan that will maintain a sound financial system. The economic ship of state is stable, under full steam and accelerating.

Breaking News This Morning ...Earnings: BB&T, Fifth Third, KeyCorp, Popular

Their only concern is that regulatory burdens remain high enough to prohibit competition, but low enough to protect revenues and profits.