Banker Outreach Forum - August 10, 2012

Chattanooga, TN

The Banker Outreach Forum, hosted by the Federal Reserve Bank of Atlanta, brought together bankers from the North Alabama, North Georgia, and East Tennessee regions to discuss profitability and risk management. The theme was "Where's the Smart Money?"

In his opening remarks at the Chattanooga event, Atlanta Fed President Dennis Lockhart highlighted several trends—in some cases, challenges—that he believes will shape the banking sector. They include ongoing pressures to achieve economies of scale, higher regulatory and capital requirements, consolidation, and enhanced technology.

Bankers in the audience shared their perspectives. In addition to two sets of interactive polls, the forum also included discussions facilitated by Katie Edge, an attorney with the regional law firm Butler, Snow, O'Mara, Stevens & Cannada PLLC. "Capital concerns, whether for geographic or product expansion, or to meet increasing regulatory requirements, were high on the bankers' list of what keeps them up at night," she noted.

"Not surprisingly," she continued, "attendees cited the increased cost and burden of regulation as one to the challenges to profitability." However, for some, these costs are a given, and the more pressing concern is trying to stay in compliance with the new rules—thus avoiding the hefty costs of non-compliance. Meanwhile, one audience member recognized another consequence of the new rules—"they're actually making us a stronger bank," he said.

Edge urged bankers to be active in communicating with their elected representatives at the state and federal levels. Capstar Bank President and CEO Claire Tucker also solicited bankers' insights, which she shares with Federal Reserve policymakers as part of her service on the Federal Reserve's Community Depository Institutions Advisory Council (CDIAC). Established in 2010, CDIAC meets twice a year at the Federal Reserve Board in Washington, D.C.