Posted by Mark Brousseau
While CFOs are becoming bullish on the economy, they are concerned about health care reform, according to a biannual survey of banking and financial services Chief Financial Officers (CFOs) and senior controllers conducted by Grant Thornton LLP.
Nearly half (48 percent) of the banking/financial services CFOs said that they expect the U.S. economy to improve in the next six months and nearly two-thirds (65 percent) are optimistic about their own company; however, 55 percent also report that they plan to increase the prices or fees charged by their company in the next six months.
Regarding health care reform, 49 percent of banking/financial services CFOs said that it will decrease their hiring (compared to 37 percent nationally), 52 percent said that it would decrease their company’s growth (compared to 40 percent nationally) and 58 percent said that it would increase their product pricing (compared to 49 percent nationally).
“Although we are seeing increased optimism in the banking and financial services sectors, firms are also bracing for the increased compliance costs that accompany both financial reform and health care reform legislation,” says Nichole Jordan, Grant Thornton LLP National Banking and Securities Industry Leader. “Unfortunately, this means that increased costs from interchange fees to expanded health care will be passed along to the consumer or will affect how aggressively firms can hire.”
When asked about the business climate in their own state, 61 percent of banking/financial services CFOs said that they are seeing a negative impact on their business due to the financial condition of their state and 66 percent reported that the actions of the political leaders in their state have not created a business-friendly environment. In addition, an overwhelming majority (95 percent) support public-private partnerships that seek to reorganize and improve the function of state and local governments and public services as a means to overcome budget challenges at the state and local level.
“Although much of the industry has focused on the impact of national financial reform, banks also need to understand how the political and fiscal environments in their own states can affect their business,” adds Jordan.
What do you think?