In early 2013, Federal Reserve Governor, Elizabeth A. Duke, gave a speech which detailed her observations and predictions for the community banking industry. Most commonly defined as banks with under $1 billion in assets, community banks were most highly represented in our most recent graduating class. In total, 60% of the 155 2013 GSBLSU graduates came from these local banks.
Of course, considering how many students come to GSBLSU from community banks, we found her speech to be of particular interest and, despite her recent resignation, felt that it was a good piece to share. She gave her own experience as a community banker in the early 90s and compared that to the challenges that are being faced today. In total, she reviewed three main points:
- Community Bankers Are Being Heard – Over 2,000 comments, many from community banks, were received and will be considered before issuing final capital rules
- Community Bank Research – This includes insight on:
- Determinants of Community Bank Profibility
- Characteristics of Thriving Community Banks
- Using Research to Shape Supervisory Guidance on Lending – This includes insight on:
- Residential Mortgage Lending
- Commercial Real Estate Lending
- Small Business Lending
Not surprisingly, Duke tied the success of a community bank directly back to its executives stating, “Managerial quality, as measured by the management component of the banks’ regulatory ratings, is strongly related to bank profitability.” She also goes on to say that “management quality is particularly important during times of economic stress.”
Of course, Graduate School of Banking at LSU has long understood the importance of continuing education for the success of bank executives. It has been our sole focus since 1950. If you would like to read Elizabeth Duke’s full speech, click here. If you would like to learn more about GSBLSU, please click the image below to access our free, informative guide.