Future Of Community Banking: A View From The Federal Reserve Board

By Tom Glatt, Jr

On February 5, 2013, Federal Reserve Governor Elizabeth A. Duke gave a speech at the Southeastern Bank Management and Director’s Conference in which she shared her views regarding the future of community banking. In the speech Governor Duke states that while the future for community banking is bright, the regulatory changes underway are not without cost to community banks.

The full text of the speech is posted below. It includes broad insight into regulatory perspectives on such topics as commercial lending, mortgage lending, core deposits, and urban vs. rural-focused banks, among others.

Governor Elizabeth A. Duke
At the Southeastern Bank Management and Directors Conference, University of Georgia, Terry College of Business, Duluth, Georgia

February 5, 2013

The Future of Community Banking

I would like to thank the Terry College of Business at the University of Georgia for the opportunity to discuss the future of community banking at this annual conference for bank officers and directors. Community banks play an important role in our nation’s financial system, and I believe that the future of community banking is bright. But that is not to say that it will be easy. Success, as always, will require energetic and engaged managers and board members who are sensitive to the financial needs of their communities, vigilant to economic conditions, and adaptive to changing regulatory requirements.

I hear from a lot of community bankers who are concerned that the community banking model might not survive. Many paint a picture so bleak that they see only personal retirement or sale of the bank as viable strategies. I completely understand how tiring it is to fight a financial crisis and survive a deep recession followed by a weak recovery only to confront what seems to be a tsunami of new regulations.

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