Good news for the economy might even translate into good news for savings accounts and other deposits, which have seen interest rates driven down to near zero by weakloan demand and Federal Reserve intervention.
With loan demand from creditworthy borrowers weak during the recession and with banks still suffering from the financial crisis, perverse accounting rules that caused them to lose regulatory capital, and persistent banker bashing from the Administration and Congress, many banks held onto their reserves to cushion further capital losses.
If I were to ask you which generation of employees is experiencing the most financial hardship, you might think of the Baby Boomers approaching retirement after a decade of weak stock and real estate markets or the Millennials squeezed between poor job prospects and high student loan payments.
In the financial sector, despite weak trading volume in Q2, results are likely to top consensus expectations on improving credit quality and large releases from loan loss reserves.