Pub. 5 2017 Issue 4

Issue 4. 2017 15 Quarterly Bank Executive Outlook Survey Highlights Q2 2017 | Promontory Interfinancial Network By Glenn Martin, Regional Director, Promontory Interfinancial Network T he country has received some solid economic news over the last several months. The U.S. unemployment rate dropped to a sixteen-year low of 4.3 percent in July (although it has ticked slightly back up to a still impressive 4.4 percent), the Dow Jones Industrial Average crossed the 22,000 mark, and U.S. gross domestic product increased 2.6 percent in the second quarter, meeting expectations. But the question of whether the current expansion will grow and deepen or instead switch direction may depend on whether a number of important policy issues are resolved in Washington this year. We believe banks have some unique insights when it comes to the nation’s economic health. In our most recent Bank Executive Business Outlook Survey, we asked bank presi- dents, CEOs, and CFOs which of following posed the great- est potential threat to the economy if Congress fails to act: • Corporate Tax Reform • Regulatory Reform • Debt Ceiling • Budget Legislation (Keep the Government Open) Not surprisingly, enactment of regulatory reform/relief legis- lation was near the top of the list for many bankers. Several respondents also cited the debt ceiling and a federal budget as important for the long-term health of the economy. But the number one choice for a sizeable majority of bank executives was the passage of corporate tax reform. Some 39 percent of survey respondents identified corporate tax reform as the top economic issue for Congress vs. 25 per- cent for regulatory reform, 19 percent for the debt ceiling, and 17 percent for budget legislation. Small community banks (less than $1 billion in assets) and larger community banks ($1 to $10 billion in assets) were almost identical in their choices, 39 percent and 37 percent respectively. Interestingly, while regulatory reform remained the second choice of small community banks, it dropped to third position among larger community banks. Regionally, corporate tax reform was the top choice in the Midwest, Northeast, and South, but regulatory reform was first choice among bank respondents in the West. Speaking of regulatory reform, we also asked bank respon- dents about leadership changes at the top banking regulatory agencies. Over the next year, President Trump will have the opportunity to appoint the chairs of the Federal Reserve and Federal Deposit Insurance Corporation to go along with his nominee to head the Office of the Comptroller of the Curren- cy—Joseph Otting. Yet survey respondents were predomi- nantly neutral or only slightly optimistic that the President’s new agency leadership would improve the regulatory environ- ment for lending. If you would like to see the complete survey please visit our survey site. If you have any questions about the survey, please email gmartin@promnetwork.com. n Glenn Martin: Over twenty years of sales experience in the banking industry. Currently a Regional Director for a seven state territory. Manages approximate- ly 150 banking relationships. Responsible for consulting with banks of all sizes on funding, liquidity management, profitability and customer acquisition. Prior to joining Promontory in May of 2006, held sales and relationship management positions for 16 years in the trust and wealth management business. Received a bachelor’s degree from the University of Kansas in 1989. Currently lives in Castle Rock, Colorado with his wife and three children.