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Recovery will start (WHEN) and take (HOW LONG)!

  • When will the recovery start and how long will it take?
  • Which of our business borrowers have the legs to hang in there that long?
  • What steps can the bank take to support those who can make it and recognize those who cannot as quickly as possible?

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Bill Conerly is an economist and consultant to business and banking who is addressing five Washington Bankers Association conferences this year. He is the author of ‘From the Headlines to Your Bottomline: How to Profit in Any Economic Cycle‘.
I spoke with Bill this week and he predicts the economy — in terms of
employment, production and spending — may hit rock bottom in April. 
“The stock market usually turns around before the economy…but it can
be anywhere from three months earlier to six months later.” I guess
that shoots down the plan to predict the recovery from what is
happening in the stock market.


Former Federal Reserve Chairman Alan Greenspan in ‘Banks Need More Capital‘, an article in this weeks Economist,
did not get more specific. “Markets are being suppressed by a degree of
fear not experienced since the early 20th century (1907 and 1932 come
to mind). Human nature being what it is, we can count on a market
reversal, hopefully, within six
months to a year.”

Which are you focused on with your business borrowers?

  • How are you going to make it through the downturn?
  • What are the opportunities in this market and what are you doing now to profit from the challenges of your competitors?
  • What steps are you taking to position your company for the recovery?

Looking at the opportunities could be a very interesting conversation…

About the Author
Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis. She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans. Creator of the Tax Return Analysis Virtual Classroom at, she speaks at banking associations on risk management, lending and director finance topics.
  1. Bill Conerly

    Just as it looks really gloomy is the time to do your contingency planning for a recovery. Here are my four steps for economic contingency planning applied to an upturn.
    1. Estimate how much your sales will improve in an upturn.
    2. Look for indicators of the upturn you can monitor; make sure you are looking at indicators close to your industry or market, rather than general economic trends.
    3. Sketch out specific action steps you’ll take when sales improve. This could include hiring additional staff, adding capacity, getting credit lines in place, etc.
    4. Manage your business every day to preserve the flexibility to take those action steps when the time comes.

    Linda, thanks for the kind words.