Breakingviews

Europe’s banks lose their cover on leverage ratio

April 11, 2014

European lenders used to defend their lowball equity-to-assets ratios by claiming U.S. rules were more lax. But new American proposals would use fundamentally the same methodology, with a higher pass mark. Tougher standards for EU banks are now much more likely.

Derivatives detail could sink bank wind-down plans

November 18, 2013

American and European regulators want to standardize contracts to help cross-border banks fail smoothly. If the problem isn’t fixed, investors could undermine financial stability by calling in swaps. It’s a reminder of how much work still needs to be done to end too big to fail.

America’s oldest lender may inspire a new beat

July 8, 2013

First Pennsylvania needed a bailout in 1980 after rising rates whacked its Treasuries portfolio. It’s now easier to hedge interest rate risk, though not perfectly. And financial institutions these days mark securities to market. Complacency, however, could cause history to rhyme.

Review: Bairing the strain of failed regulation

October 12, 2012

Former U.S. bank regulator Sheila Bair is by no means perfect, as several incidents in “Bull by the Horns” demonstrate. But she put taxpayers first and argued for banks to shoulder more of the burden for the industry’s failures, which is how the system is supposed to work.

U.S. banks loath to kick even soft crisis drug

July 31, 2012

Community banks are pushing to extend a crisis program under which the FDIC insures $1.5 trln of deposits without limit. Yet the program helps concentrate risk, distorts funding costs and brings outsized benefits to bigger banks like JPMorgan. There’s every reason to let it die.

Regulator grudge match redux: Geithner vs Bair

June 21, 2012

The former FDIC chief has formed an independent group to help push forward reforms in the U.S. financial system. The primary pressure point will be the council of regulators led by Treasury Secretary Tim Geithner. The two have sparred before. But their interests now look aligned.

BankUnited sends ominous sign with its white flag

January 17, 2012

The Florida lender rescued from the dustbin by private equity was supposed to forge an exemplary path by rolling up small banks, finding efficiencies and creating more competition. But crummy business, picky regulators and rivals too delusional to sell have left it up for grabs.

Directors and officers insurance declaws clawbacks

December 19, 2011

Forcing bosses to repay undeserved rewards is central to U.S. financial reforms. But new D&O policies are now covering the risk of lost comp - at shareholder expense. Insurers deny helping executives skirt accountability. Investors and watchdogs may see things differently.

Headless financial watchdogs needn’t be toothless

December 8, 2011

Senate Republicans blocked another Obama nominee to lead a key agency, the Consumer Financial Protection Bureau. Politics is making it tough to solidify leadership at a handful of top regulators. But as the FDIC is proving, acting directors can still get things done.

America’s too big to fail just keep getting bigger

August 23, 2011

America's biggest banks are indeed recovering nicely. But they are doing so at the expense of the country's thousands of smaller institutions.