The blogging bankers at Nicolet National Bank in Wisconsin have been on a roll over at The Vault lately. CEO Bob Atwell’s latest post addresses this month’s meeting between President Obama and a few of the country’s biggest bank CEOs. He makes some interesting points on too-big-to-fail, concluding that “centralized and politicized finance is financially and politically profitable for both politicians and financiers.” An excerpt:

“The pressing policy question is whether we are going to enact policies to ‘discourage and eliminate’ systemic risk or whether we are going to develop a ‘super-regulator’ to ‘manage’ systemic risk. Policies designed to eliminate systemic risk will foster decentralization and force bubble manufacturers to raise private capital for their reindeer games. They’ll be small self-funded games if the private players have to fund them.  Those who want to ‘manage’ systemic risk will inevitably only further politicize finance. Megabankers and mega regulators will find the ‘management of systemic risk’ model mutually beneficial, to the detriment of the rest of us.”

Atwell mentions the president’s call to banks to lend. I have repeatedly heard bankers answer that saying, we will if a.) there’s a demand and b.) the person making the demand is creditworthy. Atwell notes that loan demand is down and should be. His reasons: 1.) People are deleveraging, not taking on new debt 2.) Bank capital is expensive right now, ergo so are bank loans 3.) Cheap cash is abundant but capital is tight. Check it out here.