Bank Survey Reports

The issue of the Federal Reserve’s independence to set monetary policy and enact bank regulation has long been a focal point of debate, including in the 2024 election cycle. Many voices on the left and right have called for the Fed to be less independent, though central bank critics often differ on their approach.

Although the use of checks has continued to decline, check fraud has risen significantly —165% nationwide from 2020 to 2023—according to the United States Postal Inspection Service. This has created challenges for banks and customers who still use paper checks to pay bills. According to the results from IntraFi’s survey, 90% of all bankers said their institution has experienced higher levels of fraudulent check-writing.

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Over the past year, federal regulators and lawmakers have pushed forward several significant changes to the rules that govern the financial sector. Three of these proposed changes are either final or at the latter stages of the rulemaking process: 1) limiting overdraft fees; 2) lowering the cap on debit interchange fees; and 3) reducing late fees on credit cards.

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Bank executives are less pessimistic about the economy and the outlook for their institutions. Although they have concerns on the regulatory front and about the competitive market for deposits, the number of bankers who expect loan demand to improve and funding costs to drop increased significantly in this survey. Additionally, the percentage of bankers who think economic conditions for their bank will improve in the coming year more than doubled since last quarter.

Although credit quality continues to hold steady, bankers are pessimistic about economic conditions for their institutions and are not expecting the Federal Reserve to begin lowering interest rates anytime soon.

Nearly three quarters of bank executives are doubtful the Fed can keep the U.S. economy from sliding into a recession while - at the same time - raising interest rates to counter inflation. Only 27% of survey participants think the Fed can achieve a "soft landing" if it raises the Federal Funds Rate two more times this year. (The survey was conducted before the Fed's July meeting and quarter-point rate hike.)

Following the failures of Silicon Valley Bank and Signature Bank in March 2023, there were concerns that other institutions could fail. On May 1 (after the collection of data for this report was complete), First Republic Bank, which had teetered on the edge for weeks, also failed.

With a possible recession looming, bankers have seen loan demand fall—and expect it to keep dropping. Fifty-one percent of respondents said their bank’s loan demand decreased over the prior year, a 23-point increase from IntraFi’s survey a year earlier. Only three in ten reported a rise in demand, with 19% noting no change. Looking over the next year, 53% said they expect loan demand to decrease, a 41-point jump from a year earlier.

With inflation remaining stubbornly high, a majority of bank executives (63%) said interest rates won't peak until the first half of 2023.

Top bank executives overwhelmingly believe recession is inevitable. More than half say an overcorrection by the Federal Reserve is to blame.

Bankers are becoming increasingly concerned about funding, deposit competition, and the state of the economy overall.

As the Federal Reserve accelerates its plans to taper and prepares to raise interest rates this year, bankers are prepping for an increase in funding costs, according to the results of this quarter's Bank Executive Business Outlook Survey.

Fifty-three percent of bank respondents said they would not agree to a takeover by a credit union under any circumstance, while 47% said they would take the best offer, underscoring ongoing tensions between the two sectors in a time of growing financial consolidation.

The views of respondents representing small- and medium-sized community banks diverged on a number of key issues in this quarter's Bank Executive Business Outlook Survey.

What a difference a year makes. Last year, with the onset of the worst health pandemic in over 100 years, confidence in the economic outlook sank quickly and deeply. Now, according to the first quarter 2021 results, bank respondents provided a brighter economic outlook for their banks.

Despite some improvements in outlook, bank leaders continue to be wary about the prospects for an economic recovery in 2021. Two-thirds stated the economy will not fully recover until at least 2022 or later - with 43% saying recovery will happen in 2022 and...

The COVID-19 pandemic continues to create significant challenges for the banking sector and the U.S. economy as a whole. Though bankers are somewhat less negative about the economy than they were in the second quarter of 2020, nearly two-thirds reported that overall conditions for their bank were...

As all are well aware, the U.S. economy shrank 9.5% from April through June, the largest quarterly decline since the government began publishing data 70 years ago. The results of the most recent Bank Executive Business Outlook Survey strongly reflect this sobering state of affairs.

What a difference three months make. In the fourth quarter of 2019, the outlook among bankers about the economy and the state of the industry was solidly positive. But as a result of the COVID-19 pandemic and the uncertainty it has created, the view among bankers has sharply shifted direction.

An overview of the purpose and history of IntraFi's quarterly Bank Executive Business Outlook Survey.