Reputational Issues:  Peter G. Weinstock of Hunton & Williams LLP jump-started a lively discussion when he suggested examiners are increasingly using reputation risk "as a catch-all to challenge any banking businesses that are disfavored." Several readers were quick to agree with this assessment. "These are indeed scary times for all of us," one reader wrote. "Reputation risk has become a catch-all and can be applied to stop banks from lending to any industry policymakers [do] not like." But other readers felt examiners were simply trying to send a different message. "’When you fly with the crows, you get shot with the crows’ may be what the regulators are saying," one commented. Meanwhile, public relations consultant Harvey Radin argued that banks need to act quickly to improve their bad reputation after reviewing American Banker’s 2013 Survey of Bank Reputations. "One suggestion is to bring revenue streams into better harmony with support for commerce and enterprise," he writes. "Gearing pricing and fees to tangible improvements in goods and services or to new services might be a viable option."

Is Heavy-Handed Leadership Hampering Big Banks? Jean-Marc Laouchez, managing director of financial services at Hay Group, also got a discussion going by suggesting that heavy-handed leadership was stifling big banks’ performance. "No one is going to put a hand up with a radical new business model or push back on dangerous suggestions if they fear ridicule – or worse," he writes. One reader agreed that coercive leadership styles were likely to have a negative impact on an institution. "Directive and coercive tactics may be good in a fire but on the general organizational playground, they are still referred to as bullying," this reader commented. Another commenter added, "It is just as likely that the high reliance on incentive compensation is a major source of the banking leadership issue. Incentive compensation often becomes the way managers manage instead of really interacting with their people."

Holiday Week Potpourri: Karen Gordon of Zoot Enterprises Inc. argued that the industry shouldn’t put millions into further educating consumers about credit scores. "Pay your bills on time, check for errors on your report occasionally, keep your oldest line of credit open when possible and don't apply for multiple lines of credit you don't need," she writes. "It's really pretty straightforward." Meanwhile, Alex J. Pollock of the American Enterprise Institute argued the new Corker-Warner housing finance bill only barely improves on the GSE model. "A more fundamental approach is to demand that the financial actors internalize and capitalize the risks themselves," he wrote. "This is known as a private market." 

Last Call for Recommendations! We’re still looking for a few good banking books to include in our forthcoming 2013 Summer Reading List for Commercial Bankers. Email your favorites (with a short explanation of why you are recommending them) to BankThink Deputy Editor Jeanine Skowronski at

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