Bankeration

Banking news and insights for an evolving industry. Weekly five-minute emails with snapshots/summaries of current events. Longer posts periodically.

[Bankeration @bankeration]

The Fed releases stablecoin rules, yields climb, AI threats abound, and the 6th bank failure of 2026 — all in a 5-minute read. https://t.co/9Tqj6EL2CA #banking #banknews #financenews

[Bankeration @bankeration]

@shortbus_ace I bet the crypto industry wishes they hadn’t rolled the dice on FIT21. It’ll be interesting to see where things go from here.

[Bankeration @bankeration]

Core providers get heat, vendor risk gets reform, CLARITY gets a rewrite, bank M&A picks up, and BIS warns on cybersecurity – all in a 5-minute read. https://t.co/Kbwin4ClkW #bankingnews #financenews

[Bankeration @bankeration]

@JustBankStocks @NWWilcox @khaslett I think the unfortunate reality is that many experienced lenders were adept, in their market, at managing provisions with “historical + expertise.” And there is an algo (albeit analog & human) lurking behind “expertise.” But hard to examine for & control. And CECL is inferior.

[Bankeration @bankeration]

@JustBankStocks @NWWilcox @khaslett It is theoretically a strong model, but - in my humble opinion - works best for massive loan portfolios.

[Bankeration @bankeration]

@khaslett @NWWilcox Ha! The whole SBNY / NYCB thing was nuts. SBNY’s credits (and I don’t know how they’re performing these days) were sold off by the FDIC, and the borrowers loathed being serviced by Rialto. FCB ended up with NYCB’s book which was tied up with the Meridian scandal. Unique situation

[Bankeration @bankeration]

@khaslett @NWWilcox They were so concentrated, maybe it made sense. But in normal circumstances, that’s a really bad outcome.

[Bankeration @bankeration]

@khaslett @NWWilcox There was a lot going on at FBC at the time, and a heavy hand made sense. But pay attention to those numbers. $466MM of classified loans were paid off in that quarter. Which means they quickly found replacement credit. Which means FBC chased their good credits off their books.

[Bankeration @bankeration]

@khaslett @NWWilcox But let’s wait for the tech / analytics to become reasonable for smaller banks before requiring this type of regime.

[Bankeration @bankeration]

@khaslett @NWWilcox I can get aboard with this argument. But I still think that CECL is currently a standard that works best in GSIBs. It’s overkill for most community banks. Maybe some of the recent supervisory changes give examiners some flexibility on enforcement, and that would help.

[Bankeration @bankeration]

@khaslett @NWWilcox Regarding CRE, everyone will hate this take, but extend and pretend was deeply effective in this cycle. Loss recognition was pushed to a moment when the capital markets would support it. I don’t love it as a governing standard, but it probably spared us a lot of economic pain.

[Bankeration @bankeration]

@NWWilcox @khaslett I respectfully disagree with the invectives, but otherwise agree with @NWWilcox. The handiest example I can give is WSJ questioning CRE charge off levels in 2024 & pointing at Flagstar’s reserves as proof. But they didn’t check under the hood. https://t.co/sgvKAgGsiY

[Bankeration @bankeration]

Earnings rise, rates jump, crypto rallies, the OCC and FDIC overhaul MRAs, and economic superstars descend on Jackson Hole – all in a 5-minute read. https://t.co/XYQ5tH40BP #banking #bankingnews #financenews

[Bankeration @bankeration]

@MaxfieldOnBanks @The_Bank_Slate @robblackwellAB @AlexH_Johnson Just seeing this and I know I’m late to the party, but check out @TreasWhisperer.

[Kiah Lau Haslett is a bank reporter (she/her) @khaslett]

While I do love all things bank/financial accounting, I do think it is the responsibility of a serious crypto enthusiast to write about the proposed accounting treatment for stablecoins. You can start with @attion's write up:

[Bankeration @bankeration]

3/ AI is lowering the technical barrier even further. If the big incumbents don’t build for interoperability, execute on their roadmaps, and keep pace on functionality, there is no guarantee the will become the marketplace standard.

[Bankeration @bankeration]

1/ Something I forgot to say: there’s nothing stopping today’s stablecoin providers from issuing new tokens to satisfy new accounting rules. I think that angle is being overlooked. Waiting on The Clearing House is not the safe bet it used to be. #stablecoins #tokenizeddeposits

[Bankeration @bankeration]

2/ In the past, a banker might reasonably assume that something like The Clearing House’s tokenized-deposit network would demolish the competition and become the default. But in a SaaS-enabled, developer-first world, companies have far more tools at their disposal.