In his teachings, Dr. Willis recognized the relationship between monetary and fiscal policy, the role of banking, and their combined effects on economic growth. Recent events have illustrated, once again, the cyclical nature of the U.S. and world economies and the direct effect that economic conditions can have on banks as intermediaries of credit.
After nearly a decade of steady improvement, earnings from core bank operations and other measures of financial strength for the U.S. banking system have taken an inevitable turn. While concerns about these indicators of financial health continue to grow, the deterioration is not a source of alarm.