BankThink

Even in an uncertain economy with rising and falling stock prices, unemployment rates and consumer confidence, consumers still spend at both the local and national level, and they're often made by individuals who are either current members of your credit union or eligible for membership.

Being small in assets doesn't have to mean being small in vision.

Taxpayers are getting a bargain by propping up the cash-strapped Federal Housing Administration.

Reintroduce an element of personal liability for highly paid senior bank executives, phase out the implicit government guarantee of senior creditors' claims at large banks and increase focus on board governance to ensure better aligned incentives.

How would the largest financial institutions fare during various future economic conditions? The Federal Reserve Board has released three scenarios the 19 big banks should use in preparing for their annual stress tests required by Dodd-Frank.

Receiving Wide Coverage ...Stress Tests: The Fed released the scenarios for the next round of modeling exercises mandated by Dodd-Frank for 30 or so large banks. The hypothetical economic shocks this time include a sharp slowdown in China. An industry lobbyist tells the Journal that these theoretical stressors are "the most extreme to date." But Times columnist Peter Eavis wonders why 1970s-style runaway inflation isn't considered in the stress tests. Remote as that scenario may be, "stress tests are meant to capture the unexpected. Remember that housing crash hardly anyone foresaw?" Unlike the last two rounds of stress tests, this time the Fed will let banks whose dividend or share-buyback requests would cause them to fail the tests avoid embarrassment by revising their plans before results are published. Wall Street Journal, Financial Times, New York Times

If regulators continue to sting banks with overzealous enforcement actions and ill-conceived policies, they, like the scorpion in Aesop's fable, could find themselves up the creek without a frog or paddle.

Would the orderly liquidation authority in Title II of the Dodd-Frank Act work as intended in a megabank failure? The Clearing House Association staged a simulation to war-game that question and found it did.

The Financial Stability Oversight Council is looking at three possible reforms to the money market mutual fund industry, building on recommendations from SEC Chairman Mary Schapiro.

Dodd-Frank requires the CFPB to encourage financial innovation. The agency's Project Catalyst will colloborate with three alternative companies to gain a better understanding of how to support start-up financial players.