There's movement again in banking. Profits roll in even as warnings are issued about lackluster lending. Dodd-Frank Act regulations kick in for the over $10 Billion asset size banks to begin more intrusive reporting compliance. Basel III capital adequacy and liquidity coverage requirements are expanding. The Honorable Senator Elizabeth Warren (D-Mass) recently made good on her campaign slogan and launched her "banking should be boring" campaign to resurrect a 21st century version of the Glass-Steagall Act. And Larry Summers emerges as an unlikely successor as Federal Reserve Chairman? The summer is anything but boring. Oh the serendipity of the pun in that last sentence.
I have noticed my little thermometer of people's interest in the subject has been ticking upwards of late which is what prompts this blog posting. I collaborated with a group organized by Arianna Huffington in December of 2009 to create the "Move Your Money" consumer education campaign. I built a tool that lets anyone enter their zip code and the machine would return a web page of nearby community bank branches that were rated on the good side of the stress curve using an analytics engine adapted from one my company was selling to professionals. The system has since been expanded with location data on credit union branches as well. MYM was a timely contribution to the national conversation then delivering transparency badly needed by a country battered by a systemic meltdown; a meltdown that saw the last act of the demise of big independent investment banking. They were all absorbed into bank holding companies reporting to the Federal Reserve as part of Troubled Asset Relief Program (TARP). And now here we are an election and a half later and a potential 2016 contender is pondering whether to reverse it and perhaps reanimate the investment banking zombies. Intriguing material to be sure but I think I'll treat that question with the space it deserves in another blog post.
Link to the Move Your Money Bank Search Tool.
This blog post is about the fact that the Move Your Money bank finder tool is still running. The traffic analyzer says the zip code search feature has been used over 989,000 times now. It has not been updated for quite some time. This has always been a volunteer thing and I still program that site myself in the same way we did it over coffee at the dinner table old school dotcom one style over Christmas break 2009. I'll do a little to adapt it to some of the issues of the day later this summer. Regardless, the data has always been current and it gets a fair few page views a day. What's driven that traffic for the last three years is a mystery to me.
I have noticed people are beginning to get interested in learning more about some of those issues mentioned about banks in the first paragraph of this piece. To help explain things, I added a link to a 40+ page tutorial on bank analysis I recently wrote. It's the same tutorial that the commercial clients of what is now TBS Bank Monitor by Total Bank Solutions read as their primer. It is an introduction for corporate treasurers, credit departments, municipalities, bankers and government agencies contemplating using the ratings engine. There's a lot of good material in it. You'll find observations about where bank stress is today, how assets are being allocated by large and small banks, what's going on with income, capital, return on capital, efficiency, liquidity and lending engines at the banks.
Ordinary people are still just important to being the driving force for free market discipline today as they were in 2009. You can never have too much transparency when looking at "boring banks."