BankThink

Receiving Wide Coverage ...Bailout Redux: While the European bailout plan "set off celebrations" in markets throughout the world, many analysts warned that the plan "remains a work in progress," the Post reported. "Key details are uncertain, they say, and a slowing European economy could throw the program off course." The Journal, like a lot of other media, went full tilt on the European bailout agreement even though - or maybe because - a lot of folks are skeptical it will hold up. Yes, Americans are happy everywhere that their 401(k)s shot up with the market Thursday, but it could take "weeks" for negotiators in Europe to tell us the details of (and to figure out themselves) what they have wrought, the Journal said. Not promising was the warning by a European Central Bank official that the deal's "leverage instruments are similar to those which were among the origins of the crisis, because they temporarily masked the risks." The deal relies on "Byzantine financial engineering," another Journal story said. (A note to Scan's Greek friends: that's not a compliment.) A big push is expected. European officials are going to have to sell sovereign markets on the plan, as sovereign bond markets and others reacted cautiously. Some say the European banks got off too easy, yet others speculated the plan might work despite initial shortcomings if it boosts confidence. The Times said German Chancellor Angela Merkel called bankers' bluff, telling them to take the offer on the table of a 50% write-down in the face value of their Greek bond holdings, or bear the consequences of a default. She was willing to risk a credit event that would have thrown world markets into turmoil, and if that happened, she would blame the banks. Critics say the plan may not deliver as much relief to Greece as promised, and that it may not be sufficient to help troubled banks. "It's another patchwork effort," said Richard Cookson, global chief investment officer of Citi Private Bank. The FT looked at China's role in the rescue, and its demands that other countries be involved and its investment be guaranteed. The article quotes French President Nicolas Sarkozy: "Why would we not accept that the Chinese had confidence in the eurozone and place a part of their surpluses in our funds or our banks. Would you rather they placed it with the US?" Ouch!

Stock repurchases have increased in popularity among banks. Large institutions like Chase and Citi and smaller banks like First Horizon have or are considering open market repurchase programs.

Facebook typically protects its users from malware by blocking executable files from being sent through its messaging feature. But its filter can be tricked with a tap of the spacebar, one security expert disclosed.

If the only thing preventing a customer exodus is the sheer hassle of switching banks, there is a real danger that one day an enterprising company or competitor will come along and solve that pain point.

Breaking News This Morning ...Earnings: Synovus, BankUnited, Valley National

The Volcker rule included in the Dodd-Frank Act was intended to eliminate "proprietary trading" at universal banks. This was largely motivated by the massive losses incurred by the proprietary trading desks of Wall Street investment firms that securitized mortgages. In the rush to mitigate systemic risk in the wake of the subprime lending debacle, banking charters and the Fed's protective umbrella were extended to the remaining investment banks. The thinking was that trading is risky, and hence not appropriate for insured banks, but establishing rules to prevent trading at universal banks was never going to be easy.

Perhaps one of the security benefits of mobile wallets will be that the pairing of phones with payments makes users – and fraudsters – easier to track.

I'm hoping William Dudley would consider a meander down the street to Zuccotti Park, with the Fed's consent order against Goldman Sachs in hand. Let the crowd know that the Fed not only shares your pain, but has a few analgesics that might make you feel a bit better.

Receiving Wide Coverage ...Big Blue's New Boss: IBM will promote Virginia Rometty to be the first woman chief executive of the 100 year old company on Jan. 1. Currently its top sales executive, Rometty is a 30-year company veteran who's "help[ed] to lead IBM's transformation into a massive services business," according to Wired magazine. As such, the company has become an important vendor in the banking industry. The FT notes Rometty will be "the first head of IBM not to have run part of its traditional hardware business," not to mention "one of only a handful of women to head a large US corporation." New York Times, Wall Street Journal, Financial Times, Wired.

In all the talk about new checking account fees and their impact on the financially underserved, there has been little focus on actual consumers. It is worth reminding ourselves who "they" are.