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While much of the banking world will be watching closely Thursday to divine hints of Janet Yellen's views on the progress of regulatory reform and the need for further action, the nominee for chairman of the Federal Reserve Board is likely to offer few clues. Here's why.
November 13 -
Recent legal settlements have compounded big banks' fears about pursuing M&A, U.S. Bancorp chief Richard Davis says.
November 12 -
Half of banking and other business leaders expect a stronger economy, and 44% expect a stronger M&A market, in the next 12 months, according to a new survey. Regulation remains a concern, but dealmakers are largely ignoring the lingering problems in Washington, observers say.
November 1 -
Customers are putting their cash to work, or at least taking it out of the bank, and bankers like U.S. Bancorp CEO Richard Davis think that could signal higher demand for loans down the road.
July 17
Want businesses to borrow? Change monetary policy.
That's the of stance Richard Davis, the chairman and chief executive of U.S. Bancorp (USB). Davis is no fan of the Federal Reserve's plan to keep rates low until unemployment levels drop. As he sees it, prospective borrowers just lack the motivation. One way to whip them into shape is to tell them rates are going up.
"It is simply and absolutely the fact that interest rates are low and predicted to be so for a long time. I'm a strong advocate that it is a mistake at least for a catalyst for the economy's growth," Davis said this week at an investor conference in New York hosted by Bank of America's (BAC) Merrill Lynch unit.
"As long as you as a CEO have no rush to get a deal done because rates are about to go up because you've been told that it will be 6.5% unemployment or 2016, whichever comes first, you simply have no catalyst."
The head of the $361 billion-asset company in Minneapolis made
Like others recently, Davis also said that borrowers
"It is not for the recent and pending issue on the government shutdown or the debt ceiling. It isn't. It sounds so good to say that, but it is not," Davis said. "The smartest customers know that it is a temporary circumstance and the other ones, middle market or the others, they are not worried about that."
Davis' comments were part of a series of "fireside" chats hosted by Merrill analysts at the conference. Davis couldn't resist a crack about the lack of a hearth.
"Where's the fire?" he said at the beginning of the talk.
That was in keeping with his call for policymakers to light a fire under borrowers and the economy.
