For example, the improved ability of banks to lend to more opaque borrowers should provide some increased competition for the venture capitalists and angel financiers that were discussed at the conference yesterday. The value of gathering information through the relationship between banks and small businesses also bodes well for the survival of small community-based banks that tend to specialize in these relationships.
Most forecasts of the future of the U.S. banking industry predict that thousands of small banks will survive. I hasten to point out that these are not my personal forecasts. I stick to predicting interest rates, GDP growth, and inflation -- items over which I have more control and inside information -- and I leave the banking forecasts to others!