'Watch Out for the Giant Metal Ball': Comments of the Week
October 17, 2014 7:30 AM
American Banker readers share their views on the most pressing banking topics of the week. Comments are excerpted from reader response sections of AmericanBanker.com articles and from our social media platforms.
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On whether contradictory regulatory objectives are hurting banks' ability to serve consumer needs:
"Government intervention always disrupts the physics of business. Not matter how much the CFPB tries, the proverbial pendulum will swing back. The further the amplitude, the faster the acceleration. In other words, watch out for the giant metal ball!"
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On whether it's possible to form consistent regulation:
"Financial markets, like any other human system, are neither rational nor consistent. Insisting on both qualities in a regulatory schema is probably not very realistic, nor would it lead to meaningful goals for those tasked with leading the effort
To serve a greater purpose than the bottom line, banking companies will have to accept the inconsistent, even the contradictory, and recognize they must play in a very complex human world of need, desire, profit and loss."
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On the argument that banking regulations are causing inadvertent harm to consumers:
"Those darn regulators! If they'd just let the banks take care of consumers like before/during crisis all would be OK." (via Twitter )
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On why compliance tools that scan traders' communications for suspicious words and phrases failed to catch Libor manipulation:
"Banksters committing crimes are sneaky. That is why the software does not work. Banksters rarely are going to say, 'Let's fix, let's conspire, let's cheat.' They use code words just like the mafia. 'You know that thing we spoke about?' 'The thing from yesterday?' 'No, the other thing' 'Yeah, Ok, what about it?' And so on."
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On banks that are wary of using the public cloud because of cybersecurity concerns:
"I think that you should assume that you are breached in any environment, cloud or no cloud."
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On a suggestion that the Federal Housing Finance Agency could take a recapitalized Fannie Mae and Freddie Mac out of conservatorship:
"If there is only one thing that the world learned from the financial crisis it is that private gain in direct combination with public loss is a really bad idea."
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On whether banks' complaints about regulation are hurting their public image:
"We're in a crowd-driven world, and the crowd is starting to look outside of banking for their next cool banking app. I have to wonder if that's partly because the crowd is tired of our constant complaining about regulation, when they also hear the regs are designed to protect consumers and prevent another Great Recession. I think it's time to temper our message to the public, and explain why we complain."
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On the need for regulators to consider how efforts to reduce banks' systemic risk play out in the real world:
"Bank regulators must also look beyond the banks to see how their regulations might distort the allocation of bank credit to the real economy
What's the use of healthy banks within a dead economy?"
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