Academic journal article ABA Banking Journal

Balance or Straitjacket?

Academic journal article ABA Banking Journal

Balance or Straitjacket?

Article excerpt

It's difficult to argue with the principle of balance. The conditions of being "out of balance," "off balance," or "unbalanced" clearly are not good, whether you're talking about finance, a bowling ball, a golf swing, planetary orbit, or one's thinking.

But several things complicate that simple premise. One is that one man's "balanced approach" is another man's "overkill." Another is that achieving balance and maintaining it can be extraordinarily difficult. Third, people get bored with balance. It requires control, and control is perceived by some as inhibiting, unimaginative, and, in a financial sense, less rewarding. People want excitement. They want big results.

Given two seminars to attend, "A balanced approach to growth" and "10 ways to amp your earnings," which will be the draw? The answer depends on timing. Because once the bill comes due for too much excitement, as it did five years ago, balance suddenly looks a lot smarter. Usually not for long, however. Far longer-lasting are the reactions to the "bill" from governing bodies. As we have been witnessing, the pendulum almost always swings too far the other way: out of balance on the side of too much regulation.

There is an interesting take on balance as it relates to the business of mortgage lending in this month's issue. Contributing Editor Lucy Griffin, writing in Compliance Clinic (p. 36), says that the "tsunami" of new mortgage rules issued this year by the Consumer Financial Protection Bureau in reality returns the mortgage business to the 1970s, with loans once again based on the borrower's ability to repay. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.