The Bank of Google? Digital consultant Michael Nuciforo argued tech giant Google presents the biggest threat to traditional financial institutions. "Even though Google may have lost a few battles along the way, it is positioning itself well to win the war," he wrote. "New services represent a virtual slap in the face for the likes of banks and PayPal.  If added to the already impressive arsenal of Google Glass, they potentially represent a knockout punch." Some readers disagreed with Nuciforo's assessment, including his prediction that the tech firm would ultimately launch its own currency. "How would that further hurt banks?" one reader wrote. "Now if Google were to start taking deposits, that would be another matter. But why would they? It is so far from what they do well, and so encumbered with extra regulation, why would they go to the trouble for a business with lower margins than their current business?" Nuciforo responded: "My belief is that now and in the future, one of the key drivers on where you will store money will be how easy it is to then use that provider to make payments. If Google was to launch a virtual currency, merchants would want to accept it for cheaper/free transactions and a huge income stream for banks could be disrupted overnight."

GSE Debate Redux: Peter Wallison of the American Enterprise Institute responded to David Fiderer's May 17 post ("GSE Critics Ignore Loan Performance") by asserting that "although Fannie and Freddie acquired better-quality subprime mortgages than others, the loans they acquired were bad enough to cause these two government-backed firms to become insolvent  (which Fiderer conveniently forgets to mention)." Fiderer countered, "just about everyone knows that the GSEs became insolvent because their less than 3% capital ratios could not withstand a 30% drop in home prices. And most readers of American Banker are able to differentiate between underwriting standards and statutory capital." Scott K. Stucky took a diplomatic approach in his op-ed on housing reform by suggesting that the private market and the GSEs need each other. "By allowing private capital to invest and share the GSEs' risks, capital would be more available to the market, creating more buyers and assisting in the housing industry's recovery," he concluded.

Columnist Potpourri: Resident Risk Doctor Clifford Rossi argued Basel III oversimplifies. "So far the Basel capital standards address a myriad of risks including credit, counterparty, market, operational and liquidity," he wrote. "However, the current framework does not adequately represent how these risks relate to one another." Jon Matonis' latest Monetary Future column noted that credit unions have joined those that fear collateral damage from the Foreign Account Tax Compliance Act. "With a litany of bipartisan reasons to oppose FATCA, ranging from privacy and sovereignty to U.S. economic competitiveness, it is startling that the legislation has advanced as far as it has," he argued.

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