Our Perspectives

    View Authors September 2018

    For more than eight years, the Our Perspectives newsletter has been providing insights on the economy and public policy issues affecting the financial services industry. This edition summarizes some of the most recent developments that might be of interest.

    The Longbrake Letter
    By Bill Longbrake, guest author and Executive-in-Residence at the University of Maryland Robert H. Smith School of Business
    As we mark the 10th anniversary of the Great Financial Crisis, many are asking: Is today’s euphoria the precursor of the next financial crisis? Bill Longbrake’s answer in this month’s letter is “No.” But recession remains a definite possibility within the next 18 to 36 months. Bill explains that the economic consequences of an ordinary recession, while unpleasant of course, would be far less troublesome. Bill summarizes the recent concerns raised by the flattening of the yield curve and explains why it is not yet predicting imminent recession. He advises readers to enjoy the good times now because history tells us that strong economic momentum, when the economy is operating above full capacity, eventually leads to recession and correction of the imbalances that built up during the euphoric period of overly strong growth.

    The Longbrake Letter – Assessment of the 2018 Outlook
    By Bill Longbrake, guest author and Executive-in-Residence at the University of Maryland Robert H. Smith School of Business
    US and global growth continues to be strong and exceeds potential. The September Outlook Assessment evaluates US and global 2018 forecasts made at the beginning of the year. Practically all economies are growing above potential and little to no slack remains in most. While US data remain firmly in boom territory, recent global data, especially for Europe and emerging markets, reflect that peak growth rates have passed.

    OCC Takes the First Step Towards Modernizing CRA
    By Katie Wechsler
    This article reviews the OCC's advanced notice of proposed rulemaking on reforming and modernizing the Community Reinvestment Act regulatory framework. This begins a potentially substantial overhaul of the CRA regulations, including a new approach to assessing a bank’s performance in meeting the credit needs of its communities.