BankBeat’s Tom Bengtson discusses the challenges bankers are facing with Lance Caldwell, sales director in the Capital Markets Division of UMB Financial.
The banking industry was inundated with uncertainty last spring amid the failures of Silicon Valley Bank, Signature Bank and First Republic Bank. This year seems calmer so far, Caldwell said, but asset quality and core earnings remain areas of concern. Deposits and pricing pressures are continuing to pose growth challenges.
Caldwell hopes to open opportunities for banks to take more sophisticated approaches in managing risks. Some are reportedly undertaking more frequent stress-testing, looking into assumptions that consider market pressures and the potential impact from any flight of deposits. Banks are also evaluating contingent liquidity sources, including wholesale funding.