' But Santa Already Runs the Fed': Comments of the Year
December 30, 2014 7:30 AM
We revisit some of the best comments readers posted in 2014. Comments are excerpted from reader response sections of AmericanBanker.com and BankThink.com articles, except where noted.
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On how banks should approach their assessments of customers' creditworthiness:
"Nothing can improve upon good underwriting. I watched FICO grow in use and cause a drug-like reliance in lenders. Big data has some value but we need other old school techniques to make this work for people that don't have big data to access."
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On whether economies of scale exist in the banking industry:
"When our processes are so complex that we have checkers checking checkers, and then G-man checkers checking the checkers, that don't scale."
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On the intended purpose of the Federal Reserve's emergency powers:
"The Fed discount window and other lending facilities are not meant to keep bad banks afloat any more than a bartender is meant to keep serving drinks to a drunk."
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On how smartphones are changing Americans' day-to-day behaviors:
"Technology advances with smartphones have only increased consumers' dependence on them for daily activities. My twenty-something-year-old kids are so tied to their phones they would use them to heat up their macaroni and cheese if it was a feature."
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On alternatives to the complex Volcker Rule:
"A simpler and less costly idea is to reinstitute the Glass-Steagall Act. Put the wall in place and create stable utility businesses. There is too much money at play now; the situation is much like pro sports. Teams and the league try to enforce the [performance-enhancing drug] rules and conduct, but really don't want to, and end up looking the other way when possible. It's human nature. Make the solution simple and take the guessing out of the equation."
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Image: Bloomberg News
On the reasons for the dearth of female chief executives in the banking industry:
"While women comprise over 50% of the financial industry, only 2% of bank CEOs are female. The question isn't whether women are entitled to ascend to these positions but rather why aren't they ascending?
I cannot believe
that the lack of brains and ability is preventing women from promotions into a bank's C-suite. Their limited representation strongly implies that there are barriers for women to achieve senior-level positions." (Pictured: KeyCorp CEO Beth Mooney)
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Image: Bloomberg News
On a banker's proposal for a more-secure Internet payment system that requires identification of all users:
"Banks are hosed, but are still enormously profitable and they might be able to roll out chip-and-PIN in the USA fast enough that these breaches such as those at Target become a memory. They have such a fetish for 'know your customer.' Ugh." (Via Reddit .)
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On JPMorgan Chase refusing to process payments for a condom company due to reputational risk:
"As if JPMorgan Chase
has such a sterling reputation, that it would be besmirched by processing payments for a distributor of female condoms."
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Image: Bloomberg News
On blaming Operation Choke Point for JPMorgan's severing ties with a condom seller:
"As if it's the regulators' fault that financial institutions heard about banning scam artists and decided to ban condom shops instead." (via Naked Capitalism )
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On the argument that taxpayers remain on the hook for bank failures:
"Another basic principle of economic efficiency
is to try to internalize all the real costs of economic activity. Unfortunately customers, shareholders and executives are easily able to externalize much of the real costs of their activity when they have the moral hazard of deposit insurance and government bailouts. Now if we could eliminate ["too big to fail"] this might be different. But if one thinks this will happen in today's environment then let's put Santa in charge of the Fed."
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On a commenter's flippant suggestion to put Santa Claus in charge of the Fed:
"Santa IS in charge of the Fed already."
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On lavish spending by executives at CertusBank:
"Can a bank fail twice?"
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On banks' efforts to gather new client data in order to personalize customer service:
"It's been my experience that banks have a lot more information about their customers than they know. Often, that detail is hoarded, in the great bank silo tradition, knowingly or unknowingly. I can't help but wonder how much of the 'new' collection is redundant effort."
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On the news that Thomas O'Brien, the new president and CEO of Sun Bancorp, planned to cut 242 jobs and close the bank's retail mortgage, health care and asset-based lending businesses:
"I want a Tom O'Brien action figure doll for Christmas!"
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