BankThink

Receiving Wide Coverage ...Seriously, AIG?: We had a feeling the Internet was going to let out a collective groan once the news that AIG was considering a lawsuit against the federal government over its $182 billion bailout was picked up by news outlets and made the rounds on Twitter. (To summarize, the firm is being asked to join a suit originally launched by former CEO Maurice Greenberg, who claims the terms of the bailout were too harsh and deprived shareholders of billions of dollars.) And, oh, what a collective groan it was. "AIG, bailed out by U.S., may now sue U.S., claiming bailout terms were too harsh. We should counter-sue for stupidity," Berkeley professor and former U.S. Secretary of Labor Robert Reich tweeted with a link to an article from ABC news explaining the potential suit. "AIG considers suing government for bailing it out, world implodes in on itself," one Washington Post headline reads. Blogger Andrew Borowitz penned a satirical letter from AIG to the taxpayers for the New Yorker. (Sample line: "by suing … we are standing up for one of the most precious American rights of all: the right to sue someone who has just saved your life.") And David Weidner from MarketWatch goes so far as to suggest the government retaliate by charging AIG with treason.

The common enemy of electronic payments is cash, and so any technology that makes it more convenient and more rewarding to use a credit or debit account is good for business.

The latest insurance company to leave banking behind is Shelter Insurance of Columbia, Mo., and the insurer blames the Dodd-Frank reform law.

With the new year, the Financial Stability Oversight Council has greater opportunity to take leadership roles in other areas.

Issuers exempt from the interchange fee cap should continue to promote activation and use of their debit cards by way of issuer-sponsored and merchant-funded rewards.

Receiving Wide Coverage ...B of A Settlement: "An albatross that the bank has fought hard to loosen," that's what a Washington Post article on B of A's $11.6 billion settlement with mortgage giant Fannie Mae calls the bank's acquisition of Countrywide, which has now collectively cost B of A more than $40 billion in losses. It remains unlikely that the bank's most recent related payoff will help them shake that bird entirely. According to this American Banker article, several analysts think, moving forward, B of A's mortgage woes will linger with one writing in a research note that the bank's "financial penance for legacy issues will continue." And, even if the litigation is over, the apparently accursed acquisition's already had a lasting effect on the megabank's business model. Both the Post and the Times point out that the settlement represents B of A's continued efforts to pull out of the mortgage market, since the bank was required to sell off about 20% of its already scaled back loan servicing business to pay off Fannie Mae. This retreat, of course, isn't exactly a good thing. "This is part of a broader consolidation of banks and that is something that we should all be very, very concerned about," one analyst told Dealbook. "Anything that leads to less competition can only be bad for consumers." "You have less competition, and as a result the pricing has gotten worse," another told the Post. "Mortgage rates should probably be closer to 3.25 rather than 3.5. One of the reasons they aren't is because banks aren't that competitive and don't have to be to get business."

The Massachusetts Democrat, known for helping craft the Dodd-Frank reform law, may be putting his retirement on hold.

Some feel the looser standards will have a positive effect on the economy, while others argue the easing simply represents the latest example of regulators giving banks their way.

This bad loan was a unique case of vanity and all-pervasive incompetence on the part of both the banker and a movie producer turned real estate developer.

Every year that passes, politicians, bankers and even some financial regulators forget how illiquidity helped the 2008 financial crisis spread like wildfire.