To Kill or Not to Kill Camels: Risk management expert Richard J. Parsons kicked off a debate over Camels when he suggested the rating systems be done away with. "Unreliable, unpredictable, and outright misleading, this system must be replaced by something that is more than a clever acronym," he wrote in a post that originally ran in American Banker Magazine. North Carolina banking commissioner Ray Grace, however, countered that Camels should not be criticized for human failures. "Extended periods of economic prosperity and strong bank performance sow complacency. Regulators tend to let economic fluctuations sway the examiners' interpretations of the ratings definitions," he wrote in a Feedback column. "And like most human beings, examiners are demonstrably better at predicting the past than the future." Commenters seemed equally divided on the issue. One reader echoed Grace's assertion, writing "The independent review and rating under the Camels System can help. The problem may be that management does not take the report seriously." But BankThink's Risk Doctor Cliff Rossi sided with Parsons. "The Camels ratings process is, in fact, broken," he wrote. "Six months before WaMu's demise, the Office of Thrift Supervision rated the company a Camels 2. How can that be?"

The Last Straw for Bitcoin? Financial services attorney Ryan Straus also initiated a polarizing debate when he suggested Bitcoin will have to become "a transparent and (likely) expensive payment systemoperated by a bunch of financial institutions" in order to survive government interference. Fans of the digital currency balked at the idea that Bitcoin would have to betray its core values. "It is wishful thinking of established actors that Bitcoin will have to take on all their burdens and become as slow and expensive as they are," one reader wrote. "Yes, people dealing with other people's money have to comply with rules of financial services, but this does not extend to those dealing with their own money, selling [their] own products, and this is the core of Bitcoin." But others agreed the digital currency will face challenges down the road.  "Another [issue] is going to be coming to terms with rapid valuation changes and the capital gain and loss liabilities that would come with that," one reader commented. "Until it gains some stability, I don't think many legitimate businesses are going to take it seriously." Another quipped: "It's cute the Bitcoiners think the Bitcoin technology is immune from government interference. We'll see."

Monthly Columnists Weigh In: Promontory Financial CEO Eugene Ludwig urged banks to heed Federal Reserve Chairman Ben Bernanke's warning on interest rate risk, while retail banking expert Dave Martin asserted branch visits will be fewer, but ever more important. "While face-to-face interactions may be nowhere near the most common banking transaction these days, they continue to have an inordinate influence on how customers think and feel about a bank," he wrote. "We cannot afford to waste them."

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