The need for leadership in banking as interest rates have risen this year

Your post makes a lot of sense to me, Neil. I was chatting with a banker last week who definitely indicated he was going to wait to raise rates until possibly next year. That may be the right call for his institution, but it's worth noting that Series I bonds are now paying 9.62%. I'll grant that there are limitations on getting that money back. You can't touch it for one year and even then there's a penalty until year five. Still, my bank currently pays me [checks notes] 35 basis points. To the extent that I have cash to spare, I can tell you it doesn't make sense to keep it at that bank any longer.

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Rob Blackwell
Chief Content Officer and Head of External Affairs
IntraFi Network
Arlington, VA
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Original Message:
Sent: 05-08-2022 17:34
From: Neil Stanley
Subject: The need for leadership in banking as interest rates have risen this year

I find it interesting how many bankers speak of minimizing cost of funds as the ultimate goal. I have heard and experienced over my career that roles are designed to either produce or protect what is important. But I have discovered that the role of the top executive is to effectively and clearly define and communicate the targets that are worthy of producing and protecting as we journey forward.

In general, CEOs set the agenda and create the environment where teams work together with harmony in pursuit of the goals. The dynamics of this interest rate environment put great pressure on bank CEOs to define and communicate the opportunities to create value to both borrowers and depositors.

As the interest rate markets have risen, where has leadership communicated the value of depositors and deposits today? If your financial institution's messaging and pricing approaches to depositors has not changed in the last 12 months, someone needs to ask a simple question - How can the pricing and messaging for bank deposits used in 2020-2021 still be applicable in mid-2022 since 2-year U.S. Treasuries have risen over 200 basis points?

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Neil Stanley
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