Six months ago, 45% of bank executives thought the economy was on the right track, but a survey by Grant Thornton and Bank Director magazine found that only 15% of bankers think the economy will improve in the next six months. A majority of bankers (60%) think things will stay the same.
"Banking executives had high hopes of improvement in May, and they just haven't seen it," said Nichole Jordan, national banking and securities industry leader at Grant Thornton in New York. "What they have seen is low corporate and consumer confidence, a depressed commercial real estate market, concerning new regulations and tax increases."
Half the bankers said they did not believe this would be a double-dip recession. Bankers who felt otherwise pointed the finger at government spending and unemployment as causes.
On the plus side, only 17% said their banks would cut staff in the next six months, while 60% said they would maintain head count and 23% said they were hiring.
However, this is more likely to a reaction to increased compliance rather than expectations of an uptick in business, Jordan said.