Pub. 8 2017 Issue 4

www.wvbankers.org 16 West Virginia Banker Quarterly Bank Executive Outlook Survey Highlights Q2 2017 | Promontory Interfinancial Network By Erich Buckenmaier, 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% in July (al- though it has ticked slightly back up to a still impressive 4.4%), the Dow Jones Industrial Average crossed the 22,000 mark, and U.S. gross domestic product increased 2.6% 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 Sur- vey, we asked bank presidents, CEOs, and CFOs which of following posed the greatest 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 regula- tory reform/relief legislation 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 corpo- rate tax reform. Some 39% of survey respondents identified corporate tax reform as the top economic issue for Congress vs. 25% for regulatory reform, 19% for the debt ceiling, and 17% 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% and 37% 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 respond- ents 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 Currency—Joseph Otting. Yet survey respondents were predominantly neutral or only slightly optimistic that the Pres- ident’s new agency leadership would improve the regulatory environment 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 ebuckenmaier@promnetwork.com .  Erich Buckenmaier is the Regional Director for Promontory Interfinancial Group.