Q and A with Bill Owen

What are the top three issues facing the banking industry in 2004?

In the last 12 months approximately 10 million persons in the United States have been affected by identity theft. Bankruptcy reform and the further examination of the opportunities afforded by Graham-Leach-Bliley would also have to rank high as far as issues facing the industry.

How do you expect/hope the industry will address these issues?

In the area of identity theft, we need to increase the penalties. Currently, the Missouri Bankers Association, in conjunction with the Missouri Police Officers Association, is pushing a bill that would raise the criminal penalties for those convicted of identity theft. MBA also is in the formation stage of creating a public awareness campaign to educate people on the extent of the problem and how to avoid being a victim. Bankruptcy reform that is needs-based would be a giant step forward for not only the banking industry but the business community as well. Consideration on forgiveness should be based on what you are or are not capable of paying. Graham-Leach-Bliley was the federal legislation that began the process of opening up the financial industry to allow competition between different financial sectors. The banking industry, much like other financial sectors, will continue to track the wants and needs of its customers and try to find solutions that cut across the spectrum of financial services to meet those needs.

How is the banking industry changing in terms of how it does business and its sources of revenue?

With the advent of Graham-Leach-Bliley, banks are using the opportunity to enter other financial industries to offer their customers comprehensive solutions to their financial needs. In doing so they are able to create new fee income sources that help offset any compression in their net interest margins.

What are your concerns regarding the national economy in 2004?

An unforeseen shock such as terrorism is the one potential fly in the ointment. Outside of that, the economy appears poised to continue picking up speed in 2004 with the firm commitment of an accommodating Federal Reserve.

What are your concerns regarding the southwest Missouri economy?

Besides a calamity effecting us nationally and trickling down to the local economy, my biggest regional concern as always is the price of gasoline. With such a large tourist sector, an unforeseen spike in oil prices could seriously impact the number of visitors we see in the Ozarks.

With the unprecedented run of economic growth in the 1990s and periods of "jobless recovery" in the past two recessions, is the business cycle itself changing in some fundamental way? If so, how?

We must keep in mind that employment is traditionally a trailing component. Businesses tend to over-utilize existing employees for a period of time during the early phase of an economic recovery before hiring new help. Thus, I think we are still early enough in the business cycle that the jury is still out on whether this will be a so-called "jobless recovery" or not. My gut feeling is that we will see employment pick up as we get into 2004. As far as fundamental change in the business cycle, I think each economic period has its own challenges and uniqueness. From the bursting of the tech bubble recession of the late 1990s to the high interest rates of Paul Volker to ring out inflation of the late 1970s and early 1980s. Each expansion period that followed those recessions had to overcome different challenges. Recessions vary in depth and length. I'm not sure we can say that because we didn't experience normal job growth after the recessions of the early 1990s and late 1990s that we have altered the cycle for the foreseeable future.

What do you think of the reforms that are taking place in the financial markets?

I think these issues that were affecting after-hours trading and the mutual fund industry needed to be addressed. Anything that protects the consumer and keeps him or her on par with the professional traders is clearly a good thing.