BankThink

As Occupy the SEC detailed in our recent comment letter, the agencies’ proposed implementation of the Volcker Rule strays from Congressional intent in several big ways.

Receiving Wide Coverage ...M&A, or Lack Thereof: It is now harder for U.S. banks to make acquisitions “than at any point in at least the last 20 years,” thanks largely to regulation, the FT reports. Aside from longstanding antitrust and accounting rules, a new impediment is the Fed’s consideration of “financial stability” in approving merger applications, as required by Dodd-Frank. Although the regulator approved PNC’s deal for Royal Bank of Canada’s U.S. retail business and Capital One’s takeover of ING Direct, the Fed “put both banks through the wringer and showed a much more conservative approach to new ‘financial stability’ responsibilities than anyone in the sector thought.” Meanwhile, JPMorgan Chase is worth less than the sum of its many parts, in the estimation of veteran banking analyst Mike Mayo. He released a note making the case for breaking up the company ahead of JPM’s investor conference scheduled for today. Quips a Times reader in the comment thread: “Great idea. Once it's broken up, there will be an immediate opportunity to improve the value of the business through consolidation.”

Over the past couple of years, the seemingly dull topic of time management has become one that senior managers are showing increased interest in discussing with their teams. I suspect this has as least something to do with the fact that we are asking smaller and smaller branch teams to accomplish more with less.

Now that the agency overseeing Fannie Mae and Freddie Mac has revealed the reasoning behind its stubborn opposition to mortgage principal reduction, the problems with its argument are clear.

"Confidence was so shattered that banks were holding vast unlent sums, and businesses did not want to invest in new capital even though interest rates were at abnormally low levels…The general loss in confidence was the main cause of the low demand, and thus the low level of employment."

Extending the law that provides unlimited deposit insurance on non-interest bearing demand deposits would send a signal that just maybe the industry is not fully healthy and still needs support.

In recent months at least 650 thrift institutions have experienced a change in supervisory agency from the Office of Thrift Supervision to the Office of the Comptroller of the Currency as mandated by Dodd-Frank. Also, thrift holding companies now come under the supervision of the Federal Reserve Board.

Receiving Wide Coverage ...Wells Fargo: The FT has a pair of admiring stories on the bank. One depicts Wells as a stalwart that shunned the exotic-mortgage boom of the previous decade and is now being rewarded for its conservatism with an unprecedented 30.1% share of mortgage originations (a position that fallen archrival Countrywide’s Angelo Mozilo once dreamt of). It might be a bit of an overstatement to say Wells “stayed out of the game” of pushing the underwriting envelope (remember those first-lien home equity lines the bank was flogging in 2006?), but clearly it’s suffered less from that period’s excesses than its peers. In the other FT story, chief executive John Stumpf lays out Wells Fargo’s expansion plans, which include growth via acquisitions in wealth management and insurance and purchasing assets from European institutions that are downsizing.

We now have the credit union version of the grand, missed opportunity: Serving the Overserved. Enough already with poor people and all their moaning about living paycheck to paycheck; what about dealing with all the pressures of a paycheck that requires an asset manager and two Swiss banks?

It is true that policies and procedures are closely related, but while many treat these as if they always go together, they are not the same.