Regulators give banks report cards in the form of CAMELS ratings. These ratings can affect examination frequency, assessments, the ability to pursue acquisitions, and the likelihood of enforcement action. The ratings are also not publicly disclosed, except on an aggregated basis or in some limited instances. A recent proposal to define “unsafe or unsound” practices…

Some key regulators and bank lobbyists characterize much of bank supervision as checking the box. “Checking the box” suggests a mindless emphasis on the superficial. Maybe the phrase test-markets well. But is box checking really that prevalent? My own experience suggests that it isn’t and that there are some fundamental contradictions associated with this narrative.…