Slideshow Comments of the Week: Romanticizing Glass-Steagall; Power of Dodd-Frank; JPM Exec Shuffle

Published
  • August 03 2012, 10:52am EDT
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On the FHFA's decision against principal reductions for struggling Fannie/Freddie borrowers:

"Correct decision. Somebody has to put a stop to the moral hazard here."

Related Article: DeMarco Holds the Line, Rejects Principal Reductions

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On why borrowers should have to pay Fannie and Freddie in full: <TAB>

"As the economy continues to decline during the balance of this decade, it would be 'insane' and grossly unfair to give principal reductions. Mortgages must be honored fully, and market discipline must govern — not the government."

Related Article: DeMarco Holds the Line, Rejects Principal Reductions

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On whether principal reductions would lead to strategic defaults:

"Just because a household has remained current in its mortgage payments does not mean it is not under economic stress. Under stress, the claim that 'everybody is doing it' assuages many a guilty conscience."

Related Article: Did DeMarco Make the Right Call on Home Loans?

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On why homeowners are unlikely to strategically default on home loans:

"I don't think most people would intentionally default on their loan, unless of course they are so wealthy they can pay cash for everything else they do or they plan on living on the streets. Because there is a lot more negatives for an individual to mess up their good credit than the positive gain of intentionally defaulting."

Related Article: Did DeMarco Make the Right Call on Home Loans?

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On JPMorgan Chase's latest executive shuffle:

"While Mr. Dimon continues to throw other people under the bus for the bank's missteps and give the illusion of change, could this latest management shake-up be an indication that he may be coming to the last of his nine lives?"

Related Article: Parsing JPMorgan's Latest Exec Shakeup (Meet Matt Zames)

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On what makes a good risk manager:

"It's assumed a risk manager is honest. He/she must also be open. Even if he/she doesn't have the answer, they must raise issues and ask the right questions. A risk manager is meant to eliminate surprises."

Related Article: What Makes a Good Risk Manager?

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On taking risk:

"Risk-taking is not hitting the blind spot — risk-taking is reasoned calculation. That ability must be very sharp."

Related Article: What Makes a Good Risk Manager?

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On what should happen to HSBC following its money laundering scandal:

"Let the full weight (and I do mean in tons of paper) of all those Patriot Act/AML/FinCEN regulations fall on them."

Related Article: Let's Invite HSBC to Leave U.S.

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On why HSBC should not have to fully divest from the U.S. following its recent scandal:

"Much of what has gone wrong in HSBC in the U.S. was the result of the purchase of Republic and Household Finance. For decades HSBC ran a conservative U.S, banking operation. Let's hope they have rediscovered the old religion."

Related Article: Let's Invite HSBC to Leave U.S.


On the romanticizing of Glass-Steagall:

"Those who argue that Glass-Steagall should be reinstated because the nation prospered when it was in effect forget or didn't learn the post hoc fallacy. Because A happens and then B happens does not establish or show in any way that A caused B. Actual cause and effect must be shown. How many standalone banks failed during that period?

Related Article: Stop Romanticizing Glass-Steagall

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On why a return to Glass-Steagall warrants serious discussion:

"Is there any correlation between the fact that we did not have a major financial collapse on the scale of the Great Depression during the entire time that Glass-Steagall was in effect, and that just 7 years after it was repealed we had another Great Depression? The mother of all coincidences!"

Related Article: Stop Romanticizing Glass-Steagall

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On why there is so much discussion about dismantling megabanks:

"If the big banks acted responsibly, I doubt there would be such a call to break them up."

Related Article: Proposals to Break Up Big Banks Threaten All Banks

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On the benefits of scale:

"Breaking up large banks makes no sense. Size matters!"

Related Article: Proposals to Break Up Big Banks Threaten All Banks

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On why TCF's recent return to free checking shouldn't set a precedent:

"Since when has a slowdown in account attrition and new account openings been the driver of growing profitability for a consumer checking account?"

Related Article: TCF's Return to Free Checking: A Litmus Test for the Industry?

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"Under that theory, a lender can get up from the business table with his client, and not know until sometime later that he or she has broken the law without ever meaning to. That can't be the law."

Related Article: 'Disparate Impact' Doctrine Is Vital for Fair-Lending Exams

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On the power Dodd-Frank gives to regulators:

On the power Dodd-Frank gives to regulators: "The reality is that the new regulatory regime is a 'game changer' in ways the industry can't even fathom at this early stage — and it won't be for the better."

Related Article: Dodd-Frank Put Solution to TBTF in Regulators' Hands

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