Bank Executives Overwhelmingly Support Renomination of Jerome Powell as Fed Chairman

ARLINGTON, Va., Nov. 9, 2021 /PRNewswire/ -- An overwhelming majority of bankers want President Biden to reappoint Jerome Powell to another four-year term as chairman of the Board of Governors of the Federal Reserve, according to the Q3 Bank Executive Business Outlook survey by IntraFi Network.

Ninety percent of the bankers surveyed said Powell was the right choice for the job. Powell's term as chairman is up in February of 2022, and President Biden is expected to announce his decision soon.

"Banks are looking for stability and Chairman Powell is a known quantity at the helm of the Federal Reserve," said Mark Jacobsen, CEO and Cofounder of IntraFi Network. "If Powell is renominated, he will have considerable support across the financial sector."

While supportive of Powell, bankers signaled concerns with the possibility of the Fed issuing its own digital currency, an idea the central bank is currently exploring. Only 9% of survey respondents said the Fed should offer its own central bank digital currency (CBDC), while 31% were against the idea and 60% were unsure.

Bankers were also worried about the growing number of credit unions buying banks. So far this year, 12 credit unions have bought banks, just behind the record of 16 set in 2019. Yet despite the growth in these types of acquisitions, 53% of banks reported that they would not sell their institution to a credit union, even if it was the best offer on the table. Bankers in the midwest were even more likely to oppose such a purchase, with nearly 64% of survey respondents from that area saying they would refuse an offer.

While Washington is increasingly interested in eliminating overdraft fees, community banks so far do not appear to be entertaining changes to overdraft programs. About 70% of those surveyed said they do not offer an alternative to traditional overdraft fees and don't have plans to offer one.

While banks think the current economic outlook for the country and the financial sector are strong, the percentage of respondents that expected overall economic conditions to improve in the coming 12 months fell 12 points to 40% this quarter from the second quarter survey.

When it comes to interest rates, 43% of respondents believe the Fed will raise them by a quarter point next year, with another 34% predicting a rate hike of more than a quarter point. 

This survey garnered responses from CEOs, presidents, and CFOs at 392 unique banks across the country.

Other Highlights

• Funding Costs Seventy four percent of banks said funding costs continued to decline over the last 12 months.
• Deposit Competition Nearly half of banks said deposit competition has remained steady over the past 12 months, with 57% saying they expect it will remain so over the next year.
• Loan Demand About 45% of bankers saw either a significant or moderate increase in loan demand over the past year, compared to 33% who reported a significant or moderate decrease. Nearly half of respondents (47%) expect an increase in loan demand over the next 12 months.
• Access to Capital Seventy-nine percent of respondents expect no change for access to capital over the next year.

To read the report in its entirety, please visit our new website.

About IntraFi Network 

Chosen by thousands of banks since its founding (as Promontory Interfinancial Network) nearly two decades ago, IntraFi Network has assembled the nation's largest bank deposit network. Its solutions connect financial institutions of all sizes to help each build stronger relationships with its customers, fund more loans, and reduce collateralization. As the nation's #1 provider of reciprocal deposit products and a leading provider of overnight and term funding options, IntraFi Network has the scale to be a strategic partner for even the largest bank's funding and capital management needs, or for the smallest.

SOURCE IntraFi Network

Related Links

https://www.intrafi.com