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I have worked with a number of banks and credit unions. One of the biggest challenges on the regulatory side is that of unintended consequences. Lawmakers creat
by bsims 14y ago
I have worked with a number of banks and credit unions. One of the biggest challenges on the regulatory side is that of unintended consequences. Lawmakers create a policy meaning to spare regional banks/credit unions, but ultimately they get carried along because their 3rd party providers have to comply (core processors, Visa, etc.), which pass along those costs/rules inevitably to the smaller organization.
Pros: Capital would be lent more efficiently as region's know their markets/customers better. Generally better service. Possibly fewer loan losses due to knowing the local market better.
Cons: The largest drawback is that of security, as many regional banks/credit unions are amazingly insecure. Cost to the consumer would probably go up slightly in the form of higher loan rates and lower savings rates, but it could easily be argued large banks aren't distributing these savings anyway.
The most amazing piece I've seen was when TARP money was given to the banking industry with the goal of it being lent to consumers and businesses. Instead the capital was used to fuel M&A within the banking industry which ultimately lead to fewer jobs.
- contingencies 14y agoIn order to regain trust in banking, what is needed is a real change in culture, embedding integrity and eradicating the 'what can I get away with’ attitude. - Iain Coke, Head of Financial Services Faculty, Institute of Chartered Accountants (UK), September 2012. As quoted in http://www.telegraph.co.uk/finance/libor-scandal/9574676/Libor-reform-is-first-step-to-City-overhaul.html http://www.telegraph.co.uk/finance/libor-scandal/9574676/Lib... We need to rethink as a society what banks are for, what exchanges are for, and what clearing houses are for. If they are for the profit of the few at the expense of the many now, that is because it is the business model we have permitted. If banks, markets and clearing are protected because they have a social function, we should make certain that social function is adding value. If it isn't, then we need some new models and some new rules. - The London Banker, July 2012. http://londonbanker.blogspot.co.uk/2012/07/lies-damn-lies-and-libor.html http://londonbanker.blogspot.co.uk/2012/07/lies-damn-lies-an...