Slideshow 'Mediocre, but it works': Comments of the week

Published
  • May 19 2017, 8:30am EDT
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Readers opine on legacy core systems, the negative messaging around the Troubled Asset Relief Program, Jamie Dimon defending his Trump ties, and more.

On a call for banks to move on from their legacy core systems:

“Sadly, there is an asymmetry of outcomes when undertaking a core conversion, which the legacy core providers benefit from and remind banks of constantly. Nobody's stock goes up or CAMELS rating improves after a successful conversion, or so the thinking goes. Nobody's bonus doubles. But mess up a conversion and see what happens. So banks choose ‘mediocre and expensive but it works’ over and over again.”

Related article: Banks need to stop keeping COBOL on life support

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A reader suggests that the bad press banks received for taking Troubled Asset Relief Program funds was part of the program’s intent:

“If anything, the author is too diplomatic. Vilifying banks was not a bug of TARP, it was a feature.”

Related article: Tarp was not a bailout, and the government's profit was huge

On the Federal Reserve inadvertently releasing confidential information related to a bank’s Community Reinvestment Act procedures:

“What are the penalties for making public the ‘confidential’ section of such a letter? If a banker published an excerpt from an examination report, the result would be swift and painful.”

Related article: Sterling Financial answers Fed: We've already addressed our CRA issue

On the appointment of a new acting comptroller of the currency to take over from Thomas Curry:

"Mr. Curry's tenure is filled with leadership and oversight failures (i.e. Wells Fargo sales/incentive disaster, London Whale, Libor scandal, etc.). I am confident that the (competent and non-politico) OCC staff are dancing in the streets! Turn up the volume!"

Related article: Democrats cry foul on new acting OCC head

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On 158 academics defending the Consumer Financial Protection Bureau in a letter to lawmakers:

"Actually rather amusing — 158 people who have never managed a bank or a lender, casting down their erudite opinions on the value of the CFPB from their subsidized offices in academia. I wonder how many of them have ever put their own capital at risk to start or operate a financial services business or have ever had to work under the oppressive regulatory system we use in this country? More importantly, are the marginal benefits from the CFPB worth the tremendous cost to society?"

Related article: More than 150 law professors defend CFPB

On JPMorgan Chase CEO Jamie Dimon defending his role as an adviser to the Trump administration:

"Chase has a CEO who is cordial, behaves like an adult and has a spine when the perpetually offended (and usually compensated by special interests) stamp their feet and put on outrage theater. Refreshing."

Related article: Dimon defends his role as Trump adviser

On the pitfalls of banks holding on to their legacy core systems:

"As the business landscape evolves through the utilization of new technologies, regulatory requirements, risks, and even currencies, legacy systems are not structured to even support, no less create new opportunities that are available. Lost opportunities mean lost revenues, lost customers, and lost market share. Over eighty percent of recent core decisions have resulted in outsourcing to large service providers, thus providing further proof that Banks are just throwing in the towel."

Related article: Banks need to stop keeping COBOL on life support