Banking and Securities Outlook 2012
A year of resolution and revolution
As the clock ticks down to 2012, there is a significant overhang of uncertainty that is impacting the banking and securities marketplace:
- European sovereign debt: The Euro zone remains fragile.
- U.S. housing market and unemployment: Housing likely will continue to dampen economic recovery while the backlog of loan modifications and foreclosures clears, and consumer spending is unlikely to recover until the unemployed and “under-employed” find full-time work.
- U.S. political stalemate and election cycle: The political gridlock surrounding U.S. debt-ceiling negotiations in August did little to improve the business climate. What will come next?
- Regulatory evolution: Dodd-Frank…Durbin…Basel…the banking industry’s response is likely to be jockey, navigate, and resolve.
As the U.S. banking and securities industry looks ahead to 2012, it faces a number of challenges that these “macro” issues will likely influence, either directly or indirectly, in the months ahead. These challenges include:
- Managing fallout from the European sovereign debt crisis
- Finding ways to grow profits and contain costs in a weak economy
- Coping with political gridlock and the 2012 election cycle
- Adapting to a new era of regulatory evolution
- Understanding social activism
Some of these challenges, such as the European sovereign debt crisis and U.S. political gridlock, may move closer to resolution in the coming months; at the same time, a new wave of social activism, led by such efforts as Occupy Wall Street and Bank Transfer Day, may signal the beginning of a revolution of sorts as consumers use social media channels to respond to government and business.
Resolution and revolution … the year 2012 will likely have a little of both for the banking and securities industry.