Unlike other financial police, banking regulators either have no whistle-blower programs that provide incentives and protections for individuals to break their silence about wrongdoing they witness, or these regulators have little-known programs with comically small awards.
.. Without robust whistle-blower programs, bank regulators are like beat cops who don’t have a working 911 system.
.. Mary Jo White, the S.E.C. chairwoman, said recently that the program had been a “game changer” for the agency.
The power of community banks
reformers underestimate the significant amount of political power they wield. Even in the most broken and polarized Congress in decades, acts championed by community banks sail through as standalone legislation or attached to must-pass bills with barely any notice. Rather than a bulwark against the largest banks, community banks are just as likely to support changes that would help the largest banks while providing no new protections on them. Meanwhile research shows that community banks are doing fine financially, not struggling from regulations as most coverage shows.
.. “at least 75% of the decline in new bank formation would have occurred without any regulatory change” and that low interest rates and overall economic weakness are the bigger drivers. The fact that 10-year Treasuries fell from 2.25 percent to 1.5 percent this year, a sign of continued economic headwinds, put far more pressure on bank income than any reporting statement.
The economic issue they aren’t talking about at the DNC
Democrats have been pushing their ideas for jobs and growth. So why are they ignoring the Federal Reserve?
A report released in February found that 83 percent of Fed board members are white; nearly three-quarters are male. Nearly 40 percent come from financial institutions. Given the Fed’s role regulating the largest banks, that last statistic has proven particularly troubling for many liberal economists and progressive activists.
.. “We will also reform the Federal Reserve to make it more representative of America as a whole, and we will fight to enhance its independence by ensuring that executives of financial institutions are not allowed to serve on the boards of regional Federal Reserve banks or to select members of those boards.”
.. “No one was even talking about the notion that bankers should not select the people who serve on the Fed until this year
Nation’s Biggest Banks Would All Withstand Recession, Fed Says
Next week, they will all have to pass another type of test from the Federal Reserve that is a more subjective measure of the banks’ planning and management processes. In the past, these so-called qualitative reviews have tripped up banks including Citigroup, which failed in 2014 even after demonstrating it had adequate capital.
.. On top of that, several Fed officials have recently said that for the nation’s biggest banks, future tests will become even more difficult, with stricter capital requirements.
.. “We need to have those eight most systemically important institutions more resilient than other banks in the economy,” he said.
.. Investors have worried that weakening employment could bring about an end to a period of low defaults, particularly in automobile lending and credit cards — which have been two areas of growth for the banks.