Attempts to limit reputation risk considerations…make for a sort of enforced shortsightedness. Reputational risk can cause real, monetary damage, but that damage is hard to quantify before the fact. You should weigh not just benefits and risks that are easily quantifiable but to also consider those that aren’t.

New banking regulations go through an extensive notice and comment period. Regulators provide sometimes excruciating detail on the proposed regulation’s rationale, benefits, and costs. On the other hand, supervision of individual banks operates largely outside of the public view. Is this level of secrecy warranted?  What’s the proper balance between the need to maintain confidentiality…