BankThink

Receiving Wide Coverage ...Espresso Love: Mario Draghi could run for President -- except he already has that title at the European Central Bank, where he's taking Frankfurt by storm. The New York Times called the first days of his term "audacious," noting he's presided over an interest-rate cut, signaled a greater willingness to flex the bank's muscles in service of a crisis solution, and turned up the burner under the politicians. Speaking of politicians, that situation continues to percolate, with meetings taking place before a two-day EU summit in Brussels and a meeting of the European Central Bank Thursday. As a European summit to figure out how to solve the European Union crisis nears, President Obama sent Treasury Secretary Tim Geithner to pressure decision-makers, the Wall Street Journal reported, even as markets shook off S&P's warnings on ratings for nations in the EU, as did German Chancellor Angela Merkel. Other officials questioned the timing of S&P's move. Another Journal story looks at various options the countries can take and what they entail. The "Heard on the Street" column suggests S&P had the right idea; treat all the countries the same. And Spain's prime minister-elect Mariano Rajoy is looking for a quick fix to his nation's bank's real-estate loan woes, which may be costly.

Back in May of 2007 my company started working on a documentary, "Foreclosure Diaries," detailing a crisis that was only beginning to make itself felt. We spent time in what was then the epicenter of the foreclosure crisis; a devastated neighborhood in Cleveland known as Slavic Village. Stripped bare of habitable housing, this once bustling blue collar area was an eerie tableaux of vacant, ramshackle homes; allowed to deteriorate by outside investors who had bought and sold foreclosures, en masse, aiming to profit from a quick flip to other sets of investors; all to feed the endless appetite of Wall Street's securitization magog.

Part of the reason RSA Security fell victim to a security breach this year is that it was using an older version of Microsoft's Windows, according to a security researcher.

Ryan Gilbert's recent BankThink article "Give Nonbanks a Nationwide Reach" is part of a massive lobbying campaign by major payday lenders and others to sway Congress to pass H.R. 1909.

Doing something — anything — quickly but poorly is no substitute for taking the time to do what needs to be done well.

Receiving Wide Coverage ...E.U. or P.U.?: Standard & Poor's put Germany, France and 13 other euro-zone nations on review for possible downgrade as French President Nicolas Sarkozy and German Chancellor Angela Merkel set a week-end deadline for the 27 European Union governments to accept mandatory limits on budget deficits. The Post quotes Michael Hood, a market strategist at J.P. Morgan Asset Management, as warning of an EU breakup: "The risk is likely paralysis. You won't even know what people owe you." New York Times, Wall Street Journal, Washington Post

After multiple prominent online video game services disclosed payment-data breaches this year, one game vendor decided to commit to never storing that data in the first place.

When scammers impersonated a pair of magicians to conduct financial fraud, the victims had a trick up their own sleeves.

Receiving Wide Coverage ...Diary of Dodd-Frank: Wall Street didn't have a lot of luck in stopping Capitol Hill from imposing restrictions on its activity in the wake of the financial crisis. Now it's stepping up efforts to roll back new laws it doesn't like by challenging them in the court. The latest example came Friday when two industry trade groups-the Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association-sued to block limits on speculative trading. Their suit challenges the Commodity Futures Trading Commission's so-called position limits rule. The New York Times reports that the CFTC adopted the rule in October to cap the number of contracts a trader can hold on 28 commodities and that it is a key part of the Obama administration's efforts to enforce the Dodd-Frank Financial Reform Act. Specifically, the industry lobbies accuse the CFTC in their lawsuit of failing to evaluate the rule's economic impact on Wall Street. (They did not, notably, call for any study of the economic impact on the world economy of Wall Street's derivatives-based implosion.) "The evidence is overwhelming that position limits are, at best, unnecessary and may, at worst, negatively impact commodity markets and users," ISDA chief executive Conrad Voldstad said in a statement. Countered Sen. Carl Levin, liberal Democrat of Michigan, in a retort that summed up what has been obvious for months to even the most casual observers: "The financial industry tried to water down Dodd-Frank before it was enacted, has been trying to chip away at it since it became law, and is continuing that effort." For those involved of all political stripes, the lawsuit's intent is clear-undermine Dodd-Frank's so-called Volcker Rule, which itself aims to curtail Wall Street's speculative activity by restricting proprietary trading and private equity investments. The Wall Street Journal notes that Gibson, Dunn & Crutcher, the firm representing the industry lobbies, successfully represented the U.S. Chamber of Commerce and the Business Roundtable in suing the Securities and Exchange Commission over a new rule that would have allowed investors to more easily oust corporate directors. The so-called proxy access rule was overturned in court, and the SEC decided not to appeal the ruling. The decision incited fear among regulators, and even caused several agencies to re-examine their Dodd-Frank rules, according to the Times. As an indication of how rabidly the Street opposes bids to limit its trading activity, the Wall Street Journal reported in October that industry attorneys were stuck pulling all-nighters following the release by American Banker of a draft proposal of the Volcker Rule. The CFTC's position limit proposal alone has elicited 15,000 comment letters. No letters have been received so far expressing sympathy for sleep-deprived Wall Street lawyers. New York Times, Wall Street Journal

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