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Senior executives at banks and other financial services companies expect to notch bigger profits, fatter capital reserves and higher compliance costs in the first half of 2013, according to a new report from the Financial Services Roundtable, a Washington, D.C.-based organization that represents 100 large U.S. financial companies in policy matters.
Here are some specific findings.
- About 58 percent of the executives said they expect their company to be more profitable in the first half of the year while 71 percent said they expected growth in capital reserves. About 25 percent anticipated unchanged capital levels. Reserves are already at historic highs by some measures.
- About 83 percent of the executives said they expect costs to comply with government regulations to rise during the next six months. Nearly 15 percent expect compliance costs to stay steady, and only 1.6 percent anticipate lower compliance costs.
- About 37 percent of the executives said they expect employment at their firms to stay steady during the next six months, while 36 percent anticipate an increase in employment and 26 percent believe employment will shrink. Collectively, the organization's member companies employ 2.4 million people.
- Almost 30 percent of the executives named capital and liquidity rules as their top policy concern, while 28 percent pointed to the Consumer Financial Protection Bureau, or CFPB, as their chief policy issue. Fewer than 10 percent cited housing (that is, mortgage origination) rules or interchange rules as their top concerns.
Overall, these results suggest top banking executives are optimistic about the first half of 2013, Scott Talbott, senior vice president of public policy at the Financial Services Roundtable, said in a statement.
"Industry leaders are optimistic about the economy, but growth will be hindered by the cost of government regulation and fiscal uncertainty," Talbott said.
How about you? Are you optimistic about the economy?
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