Retail Banking Strategies

It’s always great to get positive feedback – the BAI Community just released their list of the top 10 blogs or discussion threads of the past quarter, as ranked by reader page views. We were gratified to have 4 of the top 10 “most read” articles. Here’s the list:

4. What’s In-Store for In-Store Banking?

Retail Banking Strategies blog by David Kerstein

6. Are U.S. Banks Overbranched?

Retail Banking Strategies blog by David Kerstein

7. Four Ways to Protect Deposit Fee Income

Retail Banking Strategies blog by David Kerstein

10. Strategic Planning: What’s Different this Year?

Retail Banking Strategies blog by David Kerstein

I grew up in Boston, went to college and graduate school there, and frequently go back to visit friends and family. It’s one of my favorite cities
- if you are attending BAI Retail Delivery, here’s my recommendations for “unique to Boston” restaurants, places to go, sites to see. Continue reading →

A few days ago we participated in bankerstuff.com‘s two day virtual conference on Winning Deposits in a Volatile Market. Not only was the conference a great success, but we think this represents a new model for banker networking and education. Continue reading →

Every year we look forward to reading PNC Bank’s Wealth Management group’s annual Christmas Price Index based on the cost of buying the swans-a-swimming, the lords-a-leaping and all the other gifts in the holiday classic The Twelve Days of Christmas. The PNC CPI increased by a lavish 8.1 percent over last year, the second biggest leap in the history of the analysis. Continue reading →

Tom Nist, formerly Small Business Segment Manager at PNC and currently a Professor at Duquesne University, has a very informative presentation on the background of the market crisis that he developed for his students. I think you’ll find it of interest.

There is no doubt that we are in a major financial crisis: banks are failing, the stock market is back to where it was in 2003. But just how bad is the credit crisis?

We hear lots of stories — auto dealers that can’t sell cars because buyers can’t get loans, McDonald’s franchisees who are unable to upgrade equipment required for new products because lenders have cut back, Sonic cutting back on new stores because financing sources have dried up.

Evidence lags anecdote. The Federal Reserve Bank of Minneapolis just published a working paper that questioned whether bank lending to corporations and individuals has really declined. Adam Levitin, a Professor at Georgetown, raised similar questions in his blog.

Here’s what the Minneapolis Fed study claims:

• “We see no evidence that the financial crisis has affected lending to nonfinancial businesses …. and no evidence that the financial crisis has affected consumer lending.”
• All those stories that banks were scared to lend to other banks because of uncertainty about who would be a survivor? “Interbank lending is healthy”, and the claim “that the volume of interbank lending has fallen sharply is false”.

There’s no doubt that the economy is in trouble. But is the “credit crisis” really as bad as the Scary Stories on the nightly news? Perception? Reality? Not a crisis of credit but a shrinking of demand? Sensible caution based on shrinking home equity and impending recession, not a “freezing of the credit markets”?

Perhaps better to assume the worst rather than waiting to see if the lagging data proves the case.