FEED: Financial Risk Management News

THE TOP REASON that people who have never used a bank cite for not having a savings or checking account isn't that they don't trust banks (that's seventh).

Instead, half of the unbanked and underbanked households surveyed by the Federal Deposit Insurance Corp. last year cited a simple lack of money or high minimum balances as their top reason for not using banks for their financial services.

Financial institutions in Arkansas--which has a high rate of unbanked and underbanked residents--fairly scoff at that idea.

ANALYSIS: President Obama's go-it-alone approach upset the choreography of global co-operation, writes SIMON CARSWELL in Davos, Switzerland

DAVOS 2010 wrapped up yesterday after five days of yet more soul- searching on how to regulate banking and stop the global financial world creating another crisis.

What's different this year is that Davos, with all its aspirations for global agreement, was faced with governments wanting to go it alone.

BUSINESS OPINION: Saving the banks from the consequences of their greed over consumer credit and residential mortgages could well be this autumn's crisis, JOHN McMANUS

Even those borrowers on tracker rates will be lucky to get to the end of the year without facing an increase in rates as the ECB is expected to move in the second half of the year.

Irish households are among the world's most indebted after a decade-long credit spree.

Jan. 31--At a time when dozens of Northwest banks are trying to dig themselves out of the mess left by the collapse of the housing bubble, City Bank of Lynnwood is attempting to build itself out.

AutumnWood at BrookTree in Tacoma, a gated development for "active adults age 55 or better," had just seven or eight houses on its 117 lots when City Bank repossessed it last year.

Rather than trying to sell the mostly empty project as is, City Bank hired builders and is gradually filling it in. Eight new homes are now under construction.

Jan. 31--The recent forced sale of an Oregon community bank that had two Tri-City branches comes as federal state regulators also are keeping a close eye on at least two Washington chartered banks with branches in the Tri-Cities.

Columbia River Bank was closed Jan. 22 by the Oregon Department of Consumer and Business Services and the Federal Deposit Insurance Corp. because of inadequate capital and mounting residential loan losses, officials said.

Meanwhile, federal and state regulators have ordered Spokane-based AmericanWest Bank and Sterling Savings Bank to raise more capital and create a plan to reduce their delinquent real estate and construction loans and improve long-term profitability.

Jan. 31--It seems Provident Financial Holdings is turning a corner, with its stock price shooting up 18 percent on Thursday after reporting a $2.5 million profit for the fourth quarter.

But 2010 will be a crucial year for the Riverside-based parent company of Provident Bank.

Depending on how the economy recovers, the bank faces loan losses of $80 million to $124 million over the next two years, according to a December statement detailing the results of applying federal regulatory "stress test" standards.

Jan. 31--One of the great achievements of the Progressive Era was the enactment of the Federal Reserve Act of 1913.

In part, the creation of the Federal Reserve system stemmed from periodic shortages of cash and credit.

Yet the Federal Reserve system has served the country well, and it is that contribution the Senate protected in confirming Ben Bernanke last week to a second, four-year term as chairman.

Reforms are needed urgently to bar big commercial banks from engaging in risky investments and trading, a top White House adviser says.

Paul Volcker, former Federal Reserve chairman and chairman of President Barack Obama's Economic Recovery Advisory Board, said in an opinion piece published in Sunday's New York Times that "structural reforms" are needed that would require the biggest commercial banks to spin off their investment and brokerage divisions.

Such bank activities, widely blamed for causing the financial crisis, have stretched the government "safety net" for institutions deemed "too big to fail," Volcker said.

Confronting the world's bankers head-on, President Barack Obama's top economic adviser told them Friday to put their customers first and insisted the U.S. government will push through new banking reforms despite pressure from lobbyists.

"Our challenge now is to put in place a new system," said Lawrence Summers, telling the World Economic Forum in Davos, Switzerland, that the reforms should be able to protect the public from banking excesses for at least a generation.

Summers, the top U.S. official in Davos this year, said there needed to be rules restraining how risky big banks can become.

DAVOS, Switzerland - The world's foremost gathering of business and government leaders wrapped up a five-day meeting Sunday with widespread agreement that a fragile recovery is under way but no consensus on what's going to spur job growth and prevent another global economic meltdown.

In a group of big egos and many power players attending the annual World Economic Forum, there was even some humility and a realization that overcoming the first global financial crisis is uncharted territory.

Deutsche Bank chief Executive Josef Ackermann told an AP-sponsored closing panel that the worst of the financial and economic crisis had been managed "quite successfully" but decision-makers now had a tough choice: "Should we take more risk, be a creative force for growth, or should we focus on security?"