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Survey: Bankers' confidence in industry conditions rose in Q2

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Survey: Bankers' confidence in industry conditions rose in Q2

A survey of more than 480 bankers indicated that their confidence in industry conditions continue to rise, despite mounting economic headwinds and recent recession fears.

The Promontory Interfinancial Network said the Bank Confidence Index rose to 50.1 in the second quarter, nearly 4 points higher than the first quarter figure. It was also the first time the number rose above the 50-point mark since the fourth quarter of 2017. However, several bankers voiced concern about U.S. trade policies, and many said the Dodd-Frank reform passed by the Republican-led Congress in 2018 did not lead to lower regulatory costs.

Of the bankers surveyed, 48% said the Trump administration's policies negatively affected their businesses, with 67% of bankers in the West and 61% of those in the Midwest saying their banks were negatively affected. However, 47% of bankers said the trade war had no effect on their businesses.

Tensions between Washington and Beijing have risen, with President Donald Trump saying he will impose an additional 10% tariff on $300 billion of Chinese goods on Sept. 1, and the U.S. Treasury branding China as a currency manipulator after the People's Bank of China set the yuan reference rate below the politically sensitive 7 yuan per U.S. dollar mark.

Trump also reportedly called Jamie Dimon, Brian Moynihan and Michael Corbat to ask about the state of the U.S. consumer when stock markets plunged on the news of an inverted yield curve.

A majority of bankers surveyed said the regulatory relief scheme passed by Congress did not cut down administrative and compliance burden, with only 46% of those surveyed saying costs have come down. Congress in May 2018 passed a wide range of financial regulatory reforms that mostly targeted community banks, such as allowing them to just comply with a ratio, called the community bank leverage ratio, in lieu of several other ratios but mostly left restrictions for large and global systemically important banks untouched.

Federal regulators are also set to announce their rewrite of the Volcker Rule, which is widely expected to introduce certain rollbacks on proprietary trading restrictions.