BankThink

Andrew Kahr's excellent discussion of how "Systemic Risk Is About Assets, Not Size" rightly focuses on bubble-inflating movements in the aggregate balance sheet of the financial sector. We should expand on three of his insightful points:

Receiving Wide Coverage ...Fed to the Rescue? Stock markets have rallied this week on the expectation, or hope, that Fed chairman Ben Bernanke, when he speaks Friday in Wyoming, will say the Fed plans to assist the markets by providing a third round of quantitative easing to lower long-term interest rates; or lowering the interest rate banks pay on their reserves, according to the Times. Likely not to be offered, to the consternation of the stock markets, is another round of stimulus spending. The Journal took a pessimistic stance, saying, the market's "optimism comes despite all signs to the contrary." New York Times, Wall Street Journal

"What fresh hell is this?" to quote the sharp-witted Dorothy Parker. American banking has coped with unprecedented troubles in the last couple of years and now face an interesting new twist — negative interest rates. The notion may disturb our very capitalistic core, but there is no need for panic...yet.

It is now close to three weeks since Standard & Poor's lowered its rating on U.S. debt from AAA to AA+ and we now have had sufficient time to evaluate both the downgrade and the aftermath.

The names and Social Security numbers of 43,000 people associated with Yale University were visible online and searchable via Google for 10 months.

Receiving Wide Coverage ...Fiddling (and Looting) While Rome Burned: The FDIC is suing 17 former directors and officers of Silverton Bank, charging gross negligence and corporate waste related to the May 2009 collapse of the Buckhead, Ga., bank — the state's largest. As the economy fizzled, the bank continued to pursue real estate loans. But there were other questionable actions, as the Atlanta Journal-Constitution points out: the purchase of two airplanes and a hangar to store them, and a builiding called "The Medici," a lavish headquarters that cost $35 million and boasted 26 conference rooms.

When the final chapter on this housing crisis is written, I hope that I am still around to see those who were responsible for its cause and the feeble attempts to fix it held responsible.

Six people, including four who worked at cashiers at Wal-Mart, are accused of a scam that cost Wal-Mart $125,000 and Citigroup $100,000 in fraudulent transactions.

Receiving Wide Coverage ...Foreclosure Settlement Talks: The Obama administration is pressuring New York attorney general Eric Schneiderman to accept a settlement with large banks over foreclosure practices, the Times reported. But Schneiderman has resisted because he believes it will restrict his ability to investigate things like how loans were bundled into mortgage securities. Banks are getting increasing frustrated with Schneiderman and asked the Obama administration for help in changing the New York AG's mind. The Journal, meanwhile, reports on a broader impediment to the settlement talks. The sides seem to be at a stalemate, with banks seeking wide-ranging immunity that would cover all mortgage-related charges, while state attorneys general are willing to clear the banks on robo-signing and servicer-related misdeeds, while leaving open the possibility of suits for wrongdoing in fair lending and securitization. New York Times, Wall Street Journal

One CEO recently offered some observations and insights into the credit union business and the reason for being that are among the most eloquent I have heard and are worthy of your attention.