BankThink

The market for discount notes of the Federal Home Loan Banks represents an adequate Libor replacement since, in addition to meeting other criteria, yields on its securities are the result of actual arm's length transactions with some 80 approved debt underwriters worldwide.

By proposing to design regulations intended to shape state laws and practices, the FHFA is picking a fight with the states that will overshadow any economic benefit from risk-based pricing.

The law radically expands the power of the Fed and banking regulators. It gives the institutions that created the crisis more ability to cause bigger problems in the future, writes former chairman and CEO of BB&T John Allison.

Even those who don't agree with all five policy initiatives outlined in Andrew Haldane's paper should embrace the underlying theme: It is never too late to rethink basic problems and policy prescriptions, and achieve better economic outcomes.

Receiving Wide Coverage ...SEC to the Rescue: If awards were handed out for Most Reliable Lagging Indicator in U.S. financial markets, the Securities and Exchange Commission, sad to say, would likely walk away with the gold. (Such are the vagaries of overseeing financial markets with a revolving-door staff and politically polarized Commission.) Now, in the wake of the flash crash, Knight Capital Group's near suicide and the Nasdaq-Facebook IPO flub, comes word that the SEC has gotten around to looking into HFT "kill switches." The agency has in recent days requested details from major broker-dealers about internal controls for the automated trading systems involved in electronic trading, according to the Wall Street Journal, which cites "people with knowledge of the review." The chief securities overseer is also reportedly seeking information on any recent malfunctions, how they were handled and how firms can override their computers and shut them off. The new inquiries are said to go far beyond typical audits of financial firms carried out by the securities industry's self-regulator, the Financial Industry Regulatory Authority, or Finra. They also seek details on "automatic shut-offs or kill switches" that would turn off trading programs. It may be notable that the Journal's "people with knowledge of the review" decided to share their insights the same day the New York Times reports that regulators in several other countries, including Canada, Australia and Germany, have gotten a jump on the SEC and already adopted or proposed high-frequency trading limits. "The flurry of international activity is particularly striking because regulators have been slow to act in the United States, where trading firms and investors have been hardest hit by a series of market disruptions," the Times reports. Wall Street Journal, New York Times

The law radically expands the power of the Fed and banking regulators. It gives the institutions that created the crisis more ability to cause bigger problems in the future.

In her new book former FDIC Chairman Shelia Bair argues that Treasury Secretary Timothy Geithner is to blame for the impression that the Dodd-Frank Act codifies too-big-to-fail policies.

Banks can retain loyalty while changing their checking account fee structures by personalizing their service practices, continually improving upon the customer's experience and leveraging data generated by their call centers.

Large expectation value gaps reflect either an investor relations communication problem or questions concerning the validity of management's plan. They can ultimately attract unwanted suitors and hurt a bank's future prospects.

Two of the state attorneys general in the suit against Dodd-Frank are looking out for investor and creditor rights. The law's orderly liquidation authority "violates the Constitution's separation of powers, the Fifth Amendment's guarantee of due process, and the guarantee of 'uniform' bankruptcy laws," they write.