Replying to OrrstownBankIdiocy, David asked how I monitored financial institutions.

  1. Institutional errors usually come in groups because some system broke, like with Orrstown being fined for repeatedly screwing up its loan paperwork. If something that basic breaks, might not other things be broken as well?
  2. Financial mathematics (barring derivatives) can be understood by anyone with a college calculus background. If after an hour of googling and trying to understand something, you still don't get it, walk away from it. In finance, opacity = idiocy or fraud.
  3. In the US, most financial institutions will report to some authority, like the Federal Reserve System (national and regionals), the SEC, and NCUA. These agencies then make the reports publicly available on their sites (note, not all have RSS or email notifications, you may have to hack together something to monitor).

We have adequate reporting mechanisms to detect most fraud or stupid behavior on our own if we take the time to learn accounting. Unfortunately, the reporting doesn't include IT Security or useful financial derivatives metrics. For IT, I watch's dataloss RSS feed while for derivatives, I try to use the companies SEC statements to determine what they use derivatives for, if it seems idiotic or opaque, I bail.