Conference Explores Current Banking Trends, Outlook

The Federal Reserve Bank of Atlanta's Supervision and Regulation department held its annual Banking Outlook Conference on February 25, featuring keynote speakers and panel discussions on an array of topical banking and regulatory issues.

Speakers explored:

  • the outlook for the nation's economy
  • the changing risk environment financial institutions face
  • commercial real estate markets and the impact of recent standards and regulation
  • technological innovation, especially in payments, and the impact on traditional banks
  • current concerns and views of financial regulators
  • an update on significant new accounting guidance and proposals
  • and a Southeastern perspective on the outlook for financial institutions.

Click here to see the agenda and speaker's presentations. Briefly, highlights from the daylong conference included:

  • Atlanta Fed Research Director Dave Altig said he expects the nation's economy to grow a bit more strongly this year than last. But Altig said that forecast depends heavily on an upturn in consumer spending and a resolution of a large accumulation of inventories.
  • Commercial real estate expert and Wharton School economist Sam Chandan cautioned that it is impossible to gauge exactly when the property market peaks. He said loans that become troublesome tend to be made when optimism is cresting.
  • Regulators, including Atlanta Fed Executive Vice President Mike Johnson, agreed that potential loosening of underwriting standards on real estate loans is a concern. Johnson echoed Chandan's observation that bankers tend to say others are lowering their credit standards but deny that their particular institution is doing so.
  • Competition from technologically based nonbank firms does not necessarily spell doom for traditional financial institutions, said Lee Wetherington, director of strategic insight for the financial technology firm ProfitStars. One key is that banks understand "user experience is the end game, not user interface," he said. Thus, banks need to deepen their knowledge of what makes customers feel good in their banking transactions.
  • In the age of the Dodd-Frank Act and cybersecurity threats, the position of chief risk officer has assumed a higher profile within banks.