BankThink

For some bankers, doing well by doing bad has become a way of life. If ever there was a time to raise the cost of wrongdoing, Liborgate is it.

A basketball coach's praise for his opponent serves as a reminder that the best results come from hustle and hard work.

Receiving Wide Coverage ...Diamond in the Rough: It has been a bad run for bank bosses with homophones for names, but especially for former Barclays CEO Bob Diamond, who resigned early today over the Libor scandal. Diamond said: "The external pressure placed on Barclays has reached a level that risks damaging the franchise. I cannot let that happen." The Journal said Diamond's exit could portend a turn away from his focus on expanding the company's capital markets business, which absorbed the North American operations of Lehman Brothers after that firm collapsed in 2008. The question of who to name as a successor will hinge in part on "whether the bank's board wants to continue with Mr. Diamond's drive to build out Barclays's investment banking arm. His departure could herald the splitting off or winding down of the unit as the bank looks to cut costs and adapt to tougher regulations, analysts say. The U.K. is set to pass laws in 2015 forcing banks to ring-fence their retail banking divisions from investment banking activities—a move that could drive up funding costs." Wall Street Journal, New York Times, Financial Times

Lending to American consumers, businesses and other entities is, as best practiced, far from a simple business. Going beyond this to dabble in opaque markets will inevitably degrade the competence with which banks' basic business is conducted.

Though banks must show they are resolvable, a financial institution can also use its resolution plan to advocate preferred solutions to issues on the horizon. And other lessons from the process so far.

Bankers are concerned about how sharing information with the Consumer Financial Protection Agency will affect client confidentiality. "Typically, information given to a third party loses attorney-client privilege, and prior legislation formally exempted the other bank regulators from that rule," writes American Banker's Joe Adler. "But Dodd-Frank did not expressly include the CFPB in that exemption.”

We won't have another nationwide bubble for 35 years or so. By then, cautionary tales from 2007-09 will seem irrelevant to those with modern skills and advanced risk management capability.

Two years into Dodd-Frank implementation, how is compliance going from an information technology perspective? Banks still have plenty of IT challenges to work through, agree consultants in a collection of mini-essays presented by Bank Systems & Technology. Curiously the lone voice of optimism the mix comes from a bank CEO.

You've probably heard of the Office of Financial Research's database for tracking financial companies like barcodes. It's also tasked with building another system that's equally critical – and a much greater technical challenge.

Receiving Wide Coverage ...Libor Mess: It turns out manipulating a key global interest rate for years on end can get you in some serious trouble. Stating that “the buck stops with me,” Barclays Chairman Marcus Agius has stepped down and the bank is launching an audit of its business practices, the Times says. The move is being read as an attempt to take pressure off of embattled chief executive officer Bob Diamond, the New York Times reports. The jury’s out as to whether that will be enough: the FT declares in a headline that “Decisive Week will Determine Diamond’s fate.”