Atlantic Bank’s President main speaker at a Hellenic American Bankers Reception
Thomas M. O’Brien, Atlantic Bank’s President and Chief Executive Officer, was the featured speaker at a holiday reception organized in Manhattan by the Hellenic-American Bankers Association (HABA). The topic of Mr. O’Brien’s presentation was “The New York Economy and Business Banking.” Mr. O’Brien delivered his observations of regional and national economic trends and how they affect the banking industry to a gathering of HABA members and guests at The Princeton Club.
O’Brien said that for the past three years the economy of the New Yorkh Region has been affected by a series of significant global and local events. “The effects of the collapse of the stock market bubble in 200 were compounded by the events of 9/11 and further anxiety over the subsequent global war on terrorism”, he stated.
The President of Atlantic explained that investor uneasiness intensified as a result of a series of corporate failures and scandals and as a result, financial markets deteriorated further and because of luck of trust, buyers avoided the market.
One of the hopes expressed of the investors was connected with the war in Iraq, praying a quick end to ease some of the uncertainty about the World economy.
The psychology of the investors was further aggravated by the new disclosures of improprieties in the mutual fund industry Tom O’Brien explain that it was fortunately those disclosures were made at a time Wall Street was recovering.
Presenting the outlook of the US economy, he said that, although earlier reports this year on the growth were mixed, the third quarter GDP growth rate was extremely robust, with the help of the extremely low interest rates. One of the dangers pointed by Mr O’Brien was the risk of the deflation causing inverse wealth and damage the rebounding process of the economy.
Cause for concern among both consumers and investors are the budgetary difficulties of many local and state governments, including New York City and State.
“The reality of higher state and local taxes increased corporate security costs and employee fears and other looming disinfectives to do business in New York are a cause of concern”, he said.
Speaking about the New York City and State he said that went officially into recession, 9 months prior to September 11, 2001, and two months prior to the national recession. After 10 consecutive quarters, recession seems to move to an end. But, the small 3rd quarter increase in the City’s economy lagged the nation’s turnaround by 7 quarters.
Tom O’Brien analyzed in details the various sectors of New York local and state economies, focusing especially on the fears of many service sector and non-manufacturing businesses, that struggle with profitability, liquidity and prospects of higher taxes. In addition, Big corporations and middle market companies seek to cut costs, while consumers “guard their wallets” and that has negative effect on spending.
Tom O’ Brien gave a mixed outlook for the effects to the peoples lives.
“If you are employed, educated and weren’t heavily exposed to the equity markes, the current economy is not bad at all. However, for those in the unemployment lines, including for the class of 2003, for the poor and uneducated and for those who forgot there really is risk in the stock market, these have been the most sobering of times”.
In conclusion, O’Brien expressed the belief that “conditions are ripe for a modest recovery led by some increased business investment and improved balance sheets”.