The New Normal


The U.S. banking industry is undergoing its greatest change in a generation, and the outcome is unclear. There will still be an industry, of course, but what exactly it will look like-and who the winners and losers will be-remains to be seen. There will be losers, however, and they will be those banks whose boards of directors and senior management teams fail to adapt to the new environment they find themselves in today.

The next several years will be very different from what bankers came to expect during the economic boom of the previous decade. The industry has entered a post-bubble world whose dominant themes are a weak economic recovery and new regulatory demands from Washington, DC. The New Normal is characterized by pernicious regulations that will drive up operating costs and force most banks to carry substantially higher levels of capital while cutting deeply into once reliable sources of revenue; and by a troubled U.S. economy that will challenge even the best run organizations to consistently grow their top lines.

This issue of Bank Director tackles the subject of The New Normal through stories on strategy, capital, risk management and leadership. We chose strategy because the winners will be those organizations that find growth in a stagnant economy; capital because weaker banks probably won’t get it, and that will determine their fate; risk management because there’s no longer much margin for error; and leadership because bank CEOs and directors are going to need a different set of skills if they’re going to be successful in the tough years that lie ahead.

There will be winners, for sure. And they most likely will be those institutions that accept The New Normal as the new reality. Adapt or perish-it’s an either-or choice with little room in between.


Jack Milligan


Jack Milligan is editor-at-large of Bank Director magazine, a position to which he brings over 40 years of experience in financial journalism organizations. Mr. Milligan directs Bank Director’s editorial coverage and leads its director training efforts. He has a master’s degree in Journalism from The Ohio State University.

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