Five Years Later: Patrick Sims of Hamilton Place Strategies took a contrarian view on how the financial sector is faring five years after Lehman Brothers' collapse by arguing that the industry and particularly big banks have changed for the better. "With the general push for more capital, liquidity, regulatory knowledge and tools, the financial sector is safer and more competitive," he wrote. A piece from Robert Formianion what recently deceased economist Ronald Coase's can teach us about banking offers this timely lesson: "The knee-jerk regulations passed in crisis moments can do more harm than good, but all regulation is a static framework applied to an ongoing, dynamic market." Meanwhile, American Banker Editor at Large Barb Rehm's takeaway from all "the-five-years-after-Lehman" coverage is that, based on the current pace of reform, more than 20,000 pages of new rules are to come.
Jail the Bank
or the Banker? Richard Magrann-Wells of Willis North America suggested that big banks have a get-out-jail-free card thanks to the collateral damage that would ensue if a major institution were held criminally liable for wrongdoing. "The potential cost in jobs, probable shareholder losses and market turmoil would be horrific," he wrote. Some readers thought this was a poor excuse for the lack of criminal prosecutions against big banks. "This is ludicrous!" one commenter wrote. "Personal and corporate prosecutions are absolutely necessary to stop this behavior." Others understood why financial institutions were spared, but argued that the same rules shouldn't apply to individual bankers. "I cannot understand
why these institutions have an infinite supply of these cards and are allowed to distribute them to their employees who are violating U.S. laws," Jim Wells wrote in a BankThink post responding to Magrann-Wells' piece. "Employees who would be prosecuted to the fullest extent of the law, if they worked at smaller institutions."
The Structure of CDs: Consultant Lynn David's suggestion that banks should make it harder to withdraw CDs early jumpstarted a lively discussion over whether it should be cost-effective for customers to do so. "This is the epitome of the destructive nature of the banking industry," one commenter wrote. "Penalize the customer to regain ownership of their money. When a consumer grants a bank the privilege of their patronage the consumer becomes a victim of the banks profit model." But other readers believed the issue is a gray area. "There are certain things banks must do to ensure their viability," another commenter wrote. "There are also certain things some banks do just to be greedy. This one could go either way depending on the severity of the penalties and the specific need of the bank based on their asset liability modeling."
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