Comments on: Ethics of Where You Bank

By: N25an

N25an — Sat, 28 Aug 2010 06:20:07 +0000

the strategic mind of a herd is not based on logic but the whims of opportunity, advertising and fads… the average joe just won't move his money unless he finds a big name alternative thats grinding the offending big name banks into the ground… and any such big name alternative will eventually become like the offending big name banks in question with time and an opportunity to exploit his account holders… in other words, it sounds pretty on paper. But reality leaves a lot to be desired…

By: Will Dearman

Will Dearman — Wed, 20 Jan 2010 06:28:48 +0000

I'm actually in agreement with you, Matt. In their most basic forms, banks are nothing more than custodians of value and some good could be done in the industry by reflecting upon that. Per James Gardner's "Innovation and the Future Proof Bank" I'm starting to brainstorm about my 'Futurebank' -- what sort of organization I envision being successful in the industry 10+ years from now. I haven't yet fleshed out my ideas (or finished the book), but I envision an ecosystem of lean, specialized organizations interconnected through open data standards for the consumer's benefit. I'm not sure how or if we'll get there, but it is something that is on my mind.

I think the 'new' model (for lack of a better term) would scale as efficiencies could be gained through greater specialization. This hypothetically wouldn't lead to a Too Big To Fail scenario because (1) their specialization would prevent a large-scale economic collapse, and (2) the open standards would lead to more transparent and expedient resolution. As you can imagine, I'm in favor of the originally proposed non-watered-down OTC exchange for derivative contracts as an early step in this direction.

By: matthewbward

matthewbward — Wed, 20 Jan 2010 04:45:22 +0000

Yes, those comments are the first time I've argued against ethics.

Is “ethics” the new “digital”? Has the word come to be so all-encompassing that it means nothing?

By: matthewbward

matthewbward — Wed, 20 Jan 2010 04:43:14 +0000

I can't help but think more simple institutions would help. Even going beyond Glass-Stegal, what about a return to banks that do deposits and loans and nothing more? I've read about private banks popping up with this simple agenda; I'm curious what effect you think this would have at scale. I know the big trend is on disintermediation, and thus growth of services at these banks, but maybe more specialty would help.

By: Taylor Davidson

Taylor Davidson — Wed, 20 Jan 2010 00:15:05 +0000

In the marketplace, ethics need not be subjective. Consider an objective measure: $$ flowing to companies, products, organizations that are ethical.

Ok, perhaps it's not a "new" competitive advantage; in fact, that's what I said: "This isn’t a new concept: in fact, it’s a return to our roots, an retreat from the aberration of the industrial revolution."

(btw, you'll be interested in Matt's comments on that post)

I'll check out the transactional v. revolving credit article; balancing the two in a single account creates some interesting trade-offs for credit card companies, as we both know. Curious what you're cooking up, of course...

By: Will Dearman

Will Dearman — Tue, 19 Jan 2010 22:28:48 +0000

By: matthewbward

matthewbward — Tue, 19 Jan 2010 20:45:22 +0000

Yes, those comments are the first time I've argued against ethics.

Is “ethics” the new “digital”? Has the word come to be so all-encompassing that it means nothing?

By: matthewbward

matthewbward — Tue, 19 Jan 2010 20:43:14 +0000

By: Taylor Davidson

Taylor Davidson — Tue, 19 Jan 2010 16:15:05 +0000

By: Scott Bravard

Scott Bravard — Tue, 19 Jan 2010 13:22:44 +0000

If the goal is to avoid banks that are “too big to fail,” will this strategy make small banks more attractive acquisition targets for big banks? Thereby making them even more “too big to fail?” Legislatively leveling the playing field, I think, offers more potential.