BankThink

Sheila Bair may advocate a lifelong commitment for examiners, but given existing rules, the fears of potential conflicts of interest should be more hypothetical than real.

Receiving Wide Coverage ...The Next Bailout? The Journal and the Times report today that the Federal Housing Administration's annual report, due later this week, will show that its financial condition has worsened considerably. The Journal story prominently suggests the agency may need to draw on taxpayer funds, a prospect downplayed somewhat in the Times article. If you're feeling déjà vu, it may be because on Tuesday American Banker's Kate Berry reported that the FHA was facing its own fiscal cliff.

Central banks are operating under an additional mandate beyond that of setting monetary policy: to regulate the largest, systemically important institutions. Here are five principles for doing that job well.

The election is over. Dodd-Frank is here to stay. It's time for bankers and regulators to get on with compliance and implementation, writes Editor-at-Large Barbara Rehm. She'd like to see an appointment for the director of the Office of Financial Research, stronger bank boards and leeway for examiners to go with their guts.

Fraudsters are increasingly preying on the default servicing end of the mortgage lifecycle, where traditional detection methods have not been deployed. Fortunately, there are new ways to spot red flags.

The Durbin Amendment has made debit card transactions more transparent, increased marketplace competitiveness and reduced prices. Now Congress needs to focus on credit cards.

Receiving Wide Coverage ...Money Market Funds Redux: Take 2 on money market funds is coming from the Financial Stability Oversight Council. The SEC couldn't get its act together on regulating money market funds — which have a longstanding tradition of telling investors they have a fixed value even though they kinda don't — so FSOC's stepping in. The council has told the SEC to pick the issue up again, though it's not being didactic. The SEC still can choose whether a floating net asset value or capital buffers would be appropriate. But if the agency doesn't act, the FSOC says it will. The concern for the money market industry is that, at some point, regulators get so fed up that the FSOC simply delegates the issue to the Federal Reserve and imposes a fluctuating asset value on the funds. That's "the easiest solution," one expert tells the Washington Post. While the mandate to the SEC is being viewed as the first instance of the FSOC flexing its muscles, we're not sure that it's proof of the council's robustness. Ever since a major fund "broke the buck" during the financial crisis and caused a massive dislocation in the short-term credit markets, pretty much everyone aside from the funds themselves has agreed that money markets are in clear need of greater regulation. The Financial Times provides a reminder of how slow and cautious the FSOC process is: the body is still working to determine whether AIG is systemically important, though the determination is under "advanced consideration."

Consumers who travel with debit or credit cards have no obligation to report their bank account balances or the size of their credit lines. Certainly those who rely on prepaid cards to access financial services should be entitled to the same rights.

The news that the CFPB's Deputy Director Raj Date will be leaving the agency has provoked anxiety in banking circles. Despite objections to the new agency, many have appreciated his expertise and deep understanding of the industry.

Companies that are proactive about intentionally harvesting as many diverse viewpoints as possible can inherently derive innovation out of inclusion.