Viewing the Latest Bank Executive Business Outlook Survey in Light of the Panic of 2020

I think the fear of the unknown is driving panic right now more so than the real perceived fears of the actual virus. Either way, the impact on the economy is real and you expect this pandemic to have lasting changing in the days to come, especially on the subject of globalization and supply chains. I think inflation is a real possibility for the first time in a long time. 

Comparing the Panic of 2020 to the Great Recession, I hope I don't make the same mistake I made in 2007 when I naively believed that the sub-prime meltdown wasn't going to have an impact on my bank (and local economy) in South Georgia as that didn't end so well for the bank (as well as me and my colleagues) in 2010.

I'm a "Put America First" guy but we're all in this together and I pray that we all work this out together.

John

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John Tyson
CFO/SVP
Altamaha Bank & Trust Company
Vidalia GA
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Original Message:
Sent: 03-09-2020 23:15
From: Neil Stanley
Subject: Viewing the Latest Bank Executive Business Outlook Survey in Light of the Panic of 2020

Noticed that the 4th quarter survey results of 543 banks has recently been made available to us here.   This report displays bank leaders' expectations for access to capital, deposit competition, loan demand, funding costs, and general economic conditions over the next 12 months compared to past results.  This report could be very helpful to all of us in identifying and assessing our strategic opportunities.  Check it out.

So interesting to note that just a few months ago when this survey data was assembled before the current financial panic that 88% of respondents expected loan demand to improve or stay the same over the next 12 months.  Simultaneously 56% of respondents expected deposit competition over the next 12 months to get worse.  It will be interesting to see as the markets have dramatically driven interest rates to historic lows what will happen to these competitive forces.  Could the latest events lead to economic recession or conversely to inflation as demand exists for an increasingly limited supply of goods and services?  Seems to me that the Great Recession was nothing like the Panic of 2020.

Will these survey results be accurate in reflecting the coming 12 months or is this an entirely new ballgame?  What do you think?

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Neil Stanley
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