WILLIAMSBURG, Va. - Walter Shipley, president and chief operating officer of Chemical Banking Corp., said he sees no indications of a pickup in borrowing by small businesses.
"We do no yet see the small businessman making moves. There's still a conservative tone out there," Mr. Shipley told reporters at a Business Council meeting of Fortune 500 executives.
Mr. Shipley also criticized parts of the banking industry, saying many bankers had forgotten the sector's rough times and were growing overly aggressive on pricing and terms.
Mr. Shipley said he was not referring to lending practices in the real estate or consumer sector. Instead, he singled out commercial and industry loans.
"There's some early signs of short-term memories in the industry," Mr. Shipley said, although he declined to name names. "There have been some who have begun to get aggressive."
"We just went through a very painful period," he said predicting further consolidation in the industry.
At the same news conference, J.P. Morgan & Co. chairman Dennis Weathersone said both industry and company conditions were good.
"The banking business generally has been clearly getting itself in much better shape," he said. "Our business has been very good."
He said volatile markets both in the United States and overseas had boosted the firm's risk-management business, and he pointed to strength in the company's new-issues business, equities sector, and investment management.
Mr. Weatherstone forecast that fourth-quarter U.S. economic growth would be nearer 4% than 3%.
Expects Growth Below 4%
As for next year, he predicted growth would be "a smidgen higher" than the Business Council consensus of a 3.1% growth rate, but he said he expected it to come in below 4%.
Turning to overseas prospects, Mr. Weatherstone said that Europe had to lower its interest rates further to boost sluggish growth and that Japan would probably turn to fiscal stimulus to get back on track.