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Posts Tagged ‘banking regulators’

“How Washington Hurts Small Community Banks”

Posted by Larry Doyle on January 31st, 2013 9:52 AM |

The other day I addressed the current David vs Goliath situation in the banking industry and presented The Case for Community Banks. There is no doubt that the crisis that emanated on Wall Street required some real regulatory attention. Regrettably the “one size fits all” regulatory changes embedded in Dodd-Frank is not the answer. Not that people in Washington with little background in markets and the economy might understand that.

Let’s listen to former Inspector General for the TARP, Neil Barofsky, who provides a brief 2-minute dose of ‘sense on cents’ on how Washington has hurt the small community banks in our country. Props to American Banker for this clip.

Larry Doyle

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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Retaining Risk on Wall Street: Necessary but Painful

Posted by Larry Doyle on November 5th, 2009 1:03 PM |

How did Wall Street lead the United States economy into the ditch?

The pure ‘originate to distribute’ model employed on Wall Street spelled the death knell for Wall Street and our economy.

I addressed how firms won under that originate to distribute model in a commentary from November 12, 2008, “The Wall Street Model Is Broken….and Won’t Soon Be Fixed!!”:

At the turn of the century, the Wall Street model was a pure “originate to distribute” model with little to no residual risk on behalf of the originators or underwriters. When there is no residual risk, those who “WIN” are the players that can purely process the most volume. Well, how does one get volume? Lower the credit standards, put fewer restrictions on borrowers, little to no covenants (NINA Loans: no income, no asset check). WOW!!! What were we thinking?? Well, Wall St. felt, “let’s worry about it tomorrow or maybe not at all because we are making too much money today.”

Tomorrow has arrived and Wall Street must now deal with the concept of retaining risk in their loan originations. The topic of ‘risk retention’ has been bandied about over the course of the year, but it was ratcheted up dramatically in a recent meeting of the House Financial Services Committee and U.S. Treasury on October 27th.

What came out of that meeting has potentially dramatic implications for the entire spectrum of loan origination, securitization, and distribution businesses on Wall Street and their subsequent impact on Main Street. Let’s navigate. (more…)






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