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On bank failures, Wall Street reform and the land of misfit toys

The Washington Post has published three interesting business stories this week that promise to reverberate into the new year.

One is on bank failures: 2010 saw the most U.S. banks go under since 1992, and analysts see more “on the horizon” in 2011.

“The FDIC’s list of ‘problem’ banks – those whose weaknesses ‘threaten their continued financial viability’ – stood at 860 as of Sept. 30, the highest since 1993. Historically, about a fifth of banks on the watch list end up failing.”

K Bank and Bay National Bank were among the local banks seized by the feds this year. In a bit of good news, FDIC officials and banking industry analysts think 2010 will be the “high-water mark” for failures.

Another story (via Bloomberg) is on Wall Street and its largely successful efforts to parry regulatory reform of the way it does business, even with the lingering effects of the financial meltdown still causing an economic hangover.

“The U.S. government, promising to make the system safer, buckled under many of the financial industry’s protests. Lawmakers spurned changes that would wall off deposit-taking banks from riskier trading. They declined to limit the size of lenders or ban any form of derivatives. Higher capital and liquidity requirements agreed to by regulators worldwide have been delayed for years to aid economic recovery.”

All this, Bloomberg notes, while combined investment-banking and trading revenue at Bank of America Corp., JPMorgan Chase & Co., Citigroup, Goldman Sachs Group Inc. and Morgan Stanley has reached a two-year high.

Finally, there’s this story that has generated plenty of online buzz: Amazon.com has secured a patent that could “revolutionize digital gift buying” — the ability to send back unwanted gifts before they’re even received. Someone not in step with your tastes could be flagged in Amazon’s system, with that unwanted fruit cake intercepted before it ever leaves a warehouse and a gift card sent in its place, if you set your preferences that way.

“[T]he consumer could keep an online list of lousy gift-givers whose choices would be vetted before anything ships. Amazon’s idea has raised the ire of the Miss Manners crowd, which thinks the scheme rather uncouth. After all, receiving an e-mail notification of a forthcoming gift – and thereby being able to check its price – is hardly the same as unwrapping the item at home.”

What’s really interesting is the business proposition behind the innovation: Up to 30 percent of online gift purchases are returned, the story notes, “and the cost of getting rejected gifts back across the country and onto shelves has online retailers scrambling for ways to reduce these expenses.”

Would you feel uncouth using this kind of service? I need to think about it — perhaps while I exchange a sweater I got for Christmas …