Comments of the Week: Libor Rigging, HSBC's Blunders, Interchange Settlement
July 20, 2012 7:00 AM
On Facebook CEO Mark Zuckerberg's 1% mortgage:
"At what high net worth level do you get this kind of offer?"
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(Image: Bloomberg News)
On Facebook CEO Mark Zuckerberg's 1% mortgage:
"President Obama won't be happy about this."
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(Image: Bloomberg News)
On whether merchants will pass reduced interchange on to the consumer:
"I haven't seen a time before when consumer goods have been at such a great price, while at the same time banking fees have been raised. So … who are banks trying to fool into thinking the merchants are the ones not passing on savings to the consumer?"
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On the credit card interchange settlement:
"Much of this discussion would be moot - indeed, would not have occurred - if the merchants could shop for payment products like customers shop for most products: by comparing and choosing products that offer the best value for the money."
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On merchants' dissatisfaction with the credit card settlement:
"Merchants received the largest cash antitrust settlement in history (none of which merchants must return to consumers), a reduction in interchange rates (none of which merchants must pass along to consumers), and the right to expressly charge their customers a fee for using a credit card - and they still demand government intervention to transfer more money from financial institutions and consumers to merchants."
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On the CFPB's stifling regulations:
"There is an old Supreme Court case; Bigelow v. RKO Radio Pictures (1946) which states: 'The most elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of the uncertainty which his own wrong has created.' The behemoth of fraud is what created this regulatory environment."
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On claims that CFPB regulations are stifling financial services:
"A recent poll in Spain demonstrated that the average spanish citizen feared bankers more than terrorists … Aggressive oversight is necessary to restore confidence. Absent that, the next bump will result in nationalization."
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On the CFPB's staff:
"Nearly all have spent their whole careers in government positions or academia. They do not have any real-world business experience. … Reminds me that I once read an article by a professor of aeronautical engineering that said a bumble bee theoretically can't fly, yet he got stung by one!"
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On HSBC's anti-money laundering blunders:
"Much of this is a legacy of Edmond Safra and Republic National Bank. HSBC's two major U.S. purchases of the past decade or so, Household, and Republic have done terrible damage. Going forward, it is my hope that the focus is on fundamental commercial banking."
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On Fed chair Ben Bernanke's claim that it's unclear whether U.S. banks manipulated Libor:
"Multiple agencies have been investigating for two to four years and they haven't yet determined whether the banks were fudging or not?"
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On regulators' learning of possible Libor rigging in 2008:
"This is a disgrace and the arrogance displayed shames public service. Regulators' first duty should have been to uphold the integrity of contracts based on the behavior of Libor interest rates. They did not need to turn a blind eye to this kind of fraud. They were able to use bailout and resolution tools to support weak banks in a more transparent manner."
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On the view that the Libor scandal undermines the argument that banks are over-regulated:
"Were bankers not so blind they would be getting concerned that they are no longer being called out by mere 'protesters' but by highly sophisticated critics who are willing to speak truth to power and who actually know what they are talking about. This is a subtle powershift that they won't notice until it is too late.
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On the view that the Libor scandal undermines the argument that banks are over-regulated:
"I am [in] a two-person compliance department with a community bank. We do the right thing regarding lending and investments, yet we have to pay for the sins of others. We have people in Washington making the rules that do not understand the least thing about banking."
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On a Texas community banker's lawsuit against the CFPB:
"Congress neither understands the true impact Dodd Frank has on small banks and ultimately American citizens that live in the small communities, nor do they CARE. What Congress does not understand is that the small community banks AGREE that the large banks operate in a confuse and abuse business model in dealing with their customers."
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On the Consumer Financial Protection Bureau's first enforcement action:
"Congratulations to the CFPB for taking this swift and decisive action against one of the industry's 'bad actors.' And, for demonstrating that there is a federal regulator with teeth and the fortitude to use them. Would that we could count on similar behavior at the other regulatory agencies."
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