BankThink

Regulators and governments worldwide have started a grand experiment to organize a bar code-like identifier for financial market participants. But once-innovative financial utilities may prevent this endeavor from succeeding.

Regulators are not in the bank on a day-to-day basis; usually they can only judge actions after the fact and without all of the relevant information and considerations.

Receiving Wide Coverage ...Stress Tests, Part II: Second round of results of the Federal Reserve's stress tests are in. The big items to note, per the headlines: Ally Financial and BB&T had their capital plans denied; JPMorgan Chase and Goldman Sachs received "conditional" approval for theirs since the Fed has concerns about their "ability to adequately estimate losses" when faced with a severe economic event (Both now have until September to resubmit capital proposals); and Citigroup and Bank of America — "two of the nation's most troubled banks during the crisis" — got the go ahead to reward their shareholders. The Journal has a nice round up of the banks' response to their results that outlines what their capital plans look like. Specifics about the Fed's decision regarding each bank are a bit harder to come by since, as the FT Alphaville blog puts it "the Fed wouldn't tell the banks how it arrived at its estimates, or say much that sounded like it might have come from a sentient being." General reaction to the results is mixed. The FT says the Fed's approval of about $30 billion of share buybacks represents "a vote of confidence in the strength of the U.S. financial system." The Journal cites analysts who believe the action "shows continuing unease with the risks posed by giant financial firms despite their capital raising in recent years." And Slate blogger Matthew Yglesias adopts an even more cynical stance. "This right here is the real bank bailout," he writes.

Richard Cordray, director of the Consumer Financial Protection Bureau, tried to calm community bankers' fears on Wednesday by telling them not to be concerned over the new mortgage rules issued by the agency. The CFPB's new mortgage rules will take effect next year.

Sen. Elizabeth Warren argued that Republicans opposing Richard Cordray's nomination to lead the Consumer Financial Protection Bureau is only meant to undercut the agency's work.

Political and public outcry against "too big fail" has certainly grown in the last few months. Do large financial institutions need to fear a breakup?

Megabanks may be able to fight off regulatory forces demanding their corporate downsizing, but a voluntary breakup may be the only way to sway public opinion their way.

Receiving Wide Coverage ...Whale Inquest: Ina Drew, JPMorgan's former chief investment officer, and Doug Braunstein, its former chief financial officer, will testify about the London Whale trading loss before Senator Carl Levin's investigations subcommittee Friday. It will be Drew's first public appearance since the trading losses were disclosed last year. Notably absent from the witness list: Jamie Dimon. Incidentally, the CEO turned 57 on Wednesday, prompting the Times' DealBook to remind readers that five years ago Dimon's birthday celebration at a Greek restaurant was interrupted by an urgent phone call about Bear Stearns … an anecdote staler than week-old pita bread.

The House Budget Committee released Rep. Paul Ryan's fiscal 2014 budget plan on Tuesday. The plan renews its attacks on the 2010 Dodd-Frank reform law, including its provisions for winding down large, failing banks.

In a March 12 letter, Sen. Bob Corker, a senior member of the Senate Banking Committee, raised concerns about whether the Financial Stability Oversight Council would wind down a healthy institution due to concerns regarding whether the bank is "too big to fail."