Bank execs see stagnant economy

BOSTON – Most New England bank executives believe their local economies will either remain the same or improve in the next six months, according to a national survey conducted by accounting firm Grant Thornton LLP and Bank Director magazine.

The survey, based on the responses of nearly 400 bank CEOs, chief financial officers and audit committee members, found that executives were relatively positive about the near future, but they had a more negative outlook on the effectiveness of financial reform. The survey was conducted in the spring.

Twenty-five of the banks that participated were located in New England. The regional findings included:

  • 88 percent of New England bank executives who responded believe the U.S. economy will remain the same or improve over the next six months.
  • 96 percent of New England bankers surveyed believe their local economy will remain the same or improve over the next six months.
  • 56 percent of New England banks surveyed expect their number of employees to remain the same over the next six months; almost one-third of New England banks surveyed expect their number of employees to decrease.
  • 52 percent of New England banks surveyed expect that overall financial reform will not be effective in detecting the broad risks to the financial system and preventing or reducing the threat of a future taxpayer-funded bailout.

    The key findings on a national level were:

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  • 39 percent of respondents think the U.S. economy will improve, a vast improvement since the last time the survey was conducted in August 2010, when only 15 percent of bankers expected improvement.
  • 32 percent expect the number of people employed by their bank to increase over the next six months, an uptick from the last installment when only 23 percent reported plans to increase hiring.
  • The overwhelming majority – 91 percent – indicated the burden of regulatory reform as a key concern for their bank over the next 12 months, far surpassing any other concern.
  • 48 percent do not believe Dodd-Frank will be effective at all in detecting the broad risks to the financial system and preventing or reducing the threat of a future taxpayer-funded bailout.
  • 52 percent of respondents say they are currently reassessing mortgage procedures in light of recent enforcement actions of federal banking agencies.
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