Evaluating Bank CEOs: Consultant and former community banker Joe Garrett argued a bank CEO should be measured by more than his or her firm's stock price. Instead, he wrote, board members and investors should also consider, among other things, liquidity, tangible book growth and oversight of mergers and acquisitions. One reader suggested rank-and-file employees' performance should also be considered in a CEO's evaluation and BankThink contributor Harvard Winters thought evaluators needed to account for mitigating circumstances. "First, there are bank franchise attributes that are independent of the CEO, and it would be unfair to penalize a CEO for them," Winters wrote. "JPMorgan Chase will never be able to match the ROE of Wells Fargo simply because JPM's business mix is different. Jamie Dimon shouldn't be penalized for this, nor should he feel pressure to take on undue risk in order to 'catch' Wells." Speaking of Dimon, news broke just this morning that the JPM CEO and chairman was getting a74% raise to $20 million for 2013. So, clearly, JPM's board is familiar with mitigating circumstances.

Double Dose of the Risk Doctor: Our resident Risk Doctor Cliff Rossi kicked off the week by suggesting banks and regulators would benefit from a risk index. He closed out the week by arguing that regulators have a poor handle on interest rate risk. "Relying on ad hoc, vendor-supplied estimates of industry interest rate risk exposure or woefully inadequate maturity-gap measures from call report data greatly limits regulators' abilities to spot interest rate risk at an institutional and industry level," Rossi wrote. "Without having a systematic way of evaluating interest rate risk in place on a regular basis, we may once again wind up closing the barn door behind the next crisis."

Mortgage Market Course-Correction: Jane Daugherty urged the Consumer Financial Protection Bureau to ease stringent mortgage regulations so that credit would be readily accessible to worthy borrowers. "The problem now is not subprime mortgage lenders, but a pendulum of federal regulation that has swung to such an extreme that worthy, qualified borrowers are being turned away," she wrote. "Instead of taking steps that ultimately restrict access to credit, and thus restrict economic growth, why not streamline access to credit by creating a smoother, simpler system?" And consultant Drew McMullen urged bankers to keep automation from stifling innovation in the mortgage market by looking for ways to enhance the customer experience. "The financial institutions that can figure out how to couple an efficient and optimized loan process with personalized service will win in the future," he wrote.

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