BankThink

Receiving Wide Coverage ...BOJ Goes for Broke: ...Or, perhaps, will go broke trying. Haruhiko Kuroda, the newly installed Bank of Japan governor, unveiled a package of easy-money policies Thursday that might make even Ben Bernanke blush. "This is an entirely new dimension of monetary easing, both in terms of quantity and quality," Kuroda said. "Our stance is to take all the policy measures imaginable at this point to achieve the 2% [inflation] target in two years." The program is "so aggressive in scale and tactics that it surprised investors," according to the Wall Street Journal's analysis of the markets' initial reaction to the announced doubling of central bank holdings of government bonds and the amount of yen in circulation. All told, the bond-buying program is 60% larger than the Fed's as a percentage of GDP. The BOJ has been facing intense pressure from the nation's new political leader, Prime Minister Shinzo Abe, to go big. Its contribution to Abenomics echoes moves by the Fed: aggressive buying of long-term securities, accompanied by clearly stated targets and bold talk of commitment from the central bank chief, the Journal said. Curiously, the BOJ is both joining other major central banks in testing the limits of the ability to stimulate an economy by firing up the printing presses and also going where no major central bank has gone before. The new territory involves the fact that, at more than two times GDP, Japan's debt is already exorbitant. That's true even by ultra-hocked-up modern measures. What's more its easy-money policy and near-zero interest rates are already long in the tooth. Risks abound for the BOJ and central banks worldwide. Asset bubbles, inflation and falling currency values are among them. The yen was down sharply on word of Kuroda's move. "Doubling the monetary base will weaken the yen and promote risk-taking such as stock buying," the Financial Times declared. Certainly the financial world's big thinkers have their doubts that the BOJ will be able to keep the bus on the highway. Currency speculator extraordinaire George Soros took to CNBC to warn that "If the yen starts to fall, which it has done, and people in Japan realize that it's liable to continue and want to put their money abroad, then the fall may become like an avalanche." Pimco's Bill Gross, appearing on Bloomberg TV, questioned whether other industrialized nations will permit Japan to pursue an export-driven, beggar-thy-neighbor cheap yen policy to the extent necessary to stoke 2% domestic price gains. "I'm not sure that other G-7 countries are willing to permit that," he said. We won't even venture a guess as to what David Stockman would say. Wall Street Journal

The JOBS Act will allow broader marketing of private placements. Take great care when selling these to your bank's financial advisory and wealth management clients. Focus on what suits them.

Four mortgage insurers have been ordered by the Consumer Financial Protection Bureau to pay $15 million in penalties and halt alleged kickbacks to mortgage lenders in exchange for business.

The Federal Reserve Board approved the final rule that outlines the standard regulators will use to determine if a nonbank is systemically important.

FHFA's decision to sell foreclosures in bulk is hindering the rising Hispanic consumer segment, along with other first-time buyers, from driving a healthy housing rebound.

Receiving Wide Coverage ...TD Bank: CEO Ed Clark will retire next year and hand the reins to Bharat Masrani, who has overseen the Canadian bank's expansion in the U.S. over the last six years — a hint of where TD's growth ambitions lie. The story in today's Journal leads with an anecdote suggesting customer service has worsened at the former Commerce Bank operations since the Canucks took over "America's Most Convenient Bank." Somewhere, Vernon Hill is saying "muahahaha." (Speaking of ol' Vernon, while on holiday in London last week, we passed by a branch of his Metro Bank and did a double take. It was a dead ringer for the old Commerce branches.) Wall Street Journal, Financial Times, New York Times

Recent enforcement actions indicate banks must get better at evaluating the risks associated with their third-party service providers.

Regulators and lawmakers should take steps to encourage banks to use their excess reserves to accommodate consumer credit demand.

The record shows that regulators and prosecutors have charged bank D&Os and other employees in ways that affect their personal net worth and freedom.

The Consumer Financial Protection Bureau has joined New York City Mayor Michael Bloomberg to take the Cities for Financial Empowerment program nationwide.