BankThink

Fearless forecasts for bank regulation and reform in the new year.

World of Warcraft players are willing to buy security tokens at $6.50 a pop. Why aren't bank customers?

The narrow, specialized definition of risk we have used for the past quarter century has facilitated risk modeling at the cost of excluding an entire category of risk.

If you read through enough material loss reviews prepared by the FDIC's Inspector General — essentially autopsies on failed banks — certain common themes emerge. One of the recurring themes is that many closed banks overconcentrated in commercial real estate and development loans. The rapid decline in property values, reflected by appraisals, then rendered the bank undercapitalized.

Federal regulators seem to be of two minds about the Community Reinvestment Act, a law with an explicit and limited congressional purpose of requiring each banking regulator "to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions."

Bank Transfer Day was supposedly a shot across banking's bow — a warning of customer unrest, diminished trust and fee intolerance.

Bankers drew the wrong conclusions from years of only insignificant losses resulting from poor liquidity risk management.

More than anything else, Steve Jobs was passionate about design – design that leads to improved usability. His belief that both hardware and software should be functional without training sessions and manuals has changed the way many industries look at their software. But will these ideas make it into banking?

Like the boxer was in his prime, financial crises are discombobulatingly devastating.

Continental Illinois' internal auditors had been documenting the deterioration of underwriting quality. Unfortunately, no one listened.