Bankers are losing their bullishness about an economic
turnaround. Whereas 45% of bank executives though the economy was
on the right track six months ago, a new survey by Grant Thornton
magazine found that only 15% of bankers now think the economy will
improve in the next six months. At 60%, most bankers think things
will stay the same.
"Banking executives had high hopes of improvement in May and
they just haven't seen it," says Nichole Jordan, national banking
and securities industry leader at Grant Thornton in New York. "What
they have seen in low corporate and consumer confidence, a
depressed commercial real-estate market, concerning new regulations
and tax increases."
That said, only half of bankers say they don't believe this will
be a double-dip recession. For those bankers who feel otherwise,
most point the finger at government spending and unemployment as
the causes, joint firsts at 35% (respondents could pick more than
one answer), with the European debt crisis and the Gulf oil spill
distant third and fourth, 15% and 3%, respectively.
On the plus side, only 17% said their bank will cut staff in the
next six months, while 60% said they'll maintain headcount and 23%
said they're hiring. However, this is more likely to be in reaction
to increased compliance rather than expectations of an uptick in
business, Jordan says.
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