Instead of outrage over the continuing "revolving door" between D.C. regulators and the banks (of which Bair was loudly critical of), keep in mind banks - especially the European ones - need qualified, independent directors, writes Antoine Gara.
Santander (SAN +2.3%) is a case study - maintaining a fat dividend over the past few years at the expense of building up very much new capital (though it has sold some primo assets). Wells Fargo, by contrast, pays out a lower share of profits even though its financial position is far stronger. Santander's ratio of nonperforming loans rose to 5.43% in Q3, a nearly unimaginable level for the large U.S. banks. Its NPL reserve coverage, however, has fallen from 72.4% a couple of years back to 63.9% at the end of Q3.
Would the Fed ever allow a bank in this condition to continue with such a large dividend?