BankThink

Finally, senior policymakers are focusing on negative equity. But the answer to the problem is to change borrowers' incentives, not to abrogate contract and property rights.

"Democratic Sen. Jon Tester, a member of the Senate Banking Committee, is locked in a tight reelection race against Republican Rep. Denny Rehberg," writes American Banker’s Kevin Wack.

Much more can be done with proven strategies like short sales, home leaseback programs and refinancing for underwater borrowers.

Receiving Wide Coverage ...Goldman Sachs: The Journal's lead story says the Wall Street firm is expanding its private bank, with a goal of building up its portfolio of loans to wealthy clients and corporations to $100 billion from $12 billion in March. The subsidiary bank's deposits, also sourced from well-heeled individuals, have grown to nearly $50 billion from a hair over $30 billion in 2009. Chief Executive Lloyd Blankfein tells the Journal that the firm, which converted to a bank holding company to shore up funding during the crisis, is now "looking at the revenue versus the incremental costs, not the sunk costs" of owning a regulated depository and it likes what it sees. Underscoring Goldman's need to find different ways to make money, the firm reported this morning that second-quarter profits slipped 11% as trading volumes and certain assets' values declined. Wall Street Journal, Financial Times, New York Times

The regulator's recent report highlights supposedly high-priority concerns about small banks without mentioning the size, concentration and real risks of the megabanks.

The CFPB announced that it will include credit rating agencies in the scope of its supervision. Dodd-Frank authorizes the agency to extend its oversight to non-lending institutions.

In the United States, outlining a different narrative about what happened in the financial crisis opens one to political attack.

The credit card industry's proposed deal to settle long-pending retailer lawsuits set insiders chattering, divided over how much each side won and lost in the deal.

The cost of Dodd-Frank is driving banks to charge more for checking accounts and, in turn, driving more customers out of the banking fold and into the prepaid world, writes a compliance specialist at Hancock Bank.

Directors and officers liability coverage is an unpopular topic of conversation at board meetings. But directors who shirk their responsibilities in this area may one day find their claims denied.