Pub. 2 2013 Issue 3

8 l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s T he 2013 BLOK class traveled to the Federal Reserve Bank of Kansas City on Marc 27 and experienced a personal audience with President & CEO, Esther George. In a brief introduction she explained the process for meetings of the Federal Open Markets Committee, which consists of 7 members of the Board of Governors and the Regional Reserve Bank Presidents, as well as the system for rotation of Regional President’s votes when making decisions regarding US monetary policy. President George expounded on the key issues of today’s economy to include the following: • Consumer spending accounts for 2/3 of growth in our economy. • Consumers have reduced their personal debt but re- main cautious about spending. • Businesses are also being cautious when it comes to hiring and other long-term investments. They are sit- ting on large cash reserves but remain cautious partly due to uncertainty with federal tax policy as well as uncertainty regarding future healthcare costs. • She explained that housing prices are rebounding but it is happening slowly. She continued that two of the headwinds the economy is facing is the reinstatement of payroll tax deductions and the growing national debt. President George is open in her concerns regard- ing how the continued “Historically low interest rate...” She referenced the forward guidance issued by the Federal Reserve Board that describes when the Federal Reserve Bank will begin to raise interest rates. “The Federal Reserve will tolerate some inflation until the unemployment rate falls below 6.5%. She cautioned that “we can distort interest rates and cause people to do things that they wouldn’t ordinarily do. Today’s low rate environment is causing some investors to take higher risks.” President George rationalized that in her view, there are two issues facing the banking industry: 1. Will Congress address Too Big To Fail? 2. What will capital rules be for community banks going forward? Following the discussion with Esther George, the BLOK Class’ visit continued with a comprehensive view of the history and governance of the Kansas City Federal Reserve Bank provid- ed by Krissy Young, Vice President and Public Information Officer. Tara Humston, Assistant Vice President, Examinations and Inspections Department, provided a presentation on Kansas Banking Conditions that proved to be very informative. A tour of the building including Esther George’s office, the cash vault BLOK Session II also included a special presentation from Dr. Bruce Morgan regarding the future of community banking in Kansas and members of BLOK class also participated in KBA’s Tri-State Leadership Conference held March 28 & 29 in Overland Park. BLOK Session II Bank Leaders of Kansas Listening to Esther George's presentation is (left) Lonnie Wild, Patrick Harbert, Matt Needham, Miki Bowman, Darlene Schmidt, Codi Mason and Jan Endicott