PayThink

The payments industry still has much to do before anyone can claim mobile payments are secure. Many merchants, consumers, and processors are mistakenly comfortable with notion that encryption equals full security.

Do we really want banks to be stable, profitable and internationally competitive or do we want them to be cash cows for Congress?

With media outlets reporting the grisly details, there has never been a better time to educate commercial account holders about the risks associated with online banking, particularly phishing attacks.

The framework released by the National Institute of Standards and Technology should serve as an important tool for banks in meeting regulators’ heightened expectations for managing cyber risk.

Even though there are more mobile devices than people, many retailers continue to scratch their heads as to why there’s so much less enthusiasm behind mobile payments than overall mobile adoption.

Recently released transcripts of Federal Reserve meetings during the last financial crisis reflect how blind policymakers remained to what was unfolding even at its peak. That suggests the Financial Stability Oversight Council’s efforts to sound an early warning next time around are reminiscent of Charlie Brown hoping Lucy won’t pull away the football.

Risk is like water, seeking the path of least resistance. If the path is narrowed, risk does not necessarily evaporate, as regulators wish, but often focuses as a more concentrated force. Accepting this alternative concept of risk has far-reaching policy consequences.

Continued focus on this single, but complex Dodd-Frank provision will distract bank managers and regulators from finding ways to make the global financial system healthier.

Prohibiting future ownership of unstable CLOs is probably a good thing. Forcing a select group of banks, however, to sell these assets over a short time is not the optimal solution.

A recap of the informed opinions (and the discussions they generated) on BankThink this week.