Can Community Banks Pull Us Out Of Recession? Frankly, I’m Skeptical
I am a big fan of small banks.
Community banks often pick up the slack, taking on the loans and customers that the big banks feel they are too busy or important to handle.
But can our local banks really fill the lending void that has opened up as our region’s biggest banks struggle to repair badly wounded balance sheets?
It’s a question I pose in my column this week for B&T.
Surprisingly, one of the skeptics on this question is none other than an executive at one of the South Shore’s leading local banks, Rockland Trust.
Gerry Nadeau, a senior lender at the bank, said the struggles the financial giants are facing have opened up unprecedented opportunities for small and mid-sized players.
Nonetheless, he’s nervous about the prospects for our local economy when the region’s three largest banks, Citizens, Sovereign and Bank of America, are scrambling to shore up their balance sheets with additional capital.
While community banks can do a lot, they simply don’t have the capacity to provide the massive amount of credit needed to lift the Boston area out of the economic doldrums.
It’s certainly an unusual - and brave – view for a banker to take.
Others are concerned not only about the health of the big banks in our region, but the fact that we no longer have any major banks headquartered here.
With major projects like the redevelopment of the Filene’s complex sitting stalled, there’s no big bank with a vested interest in the city to lead the charge.
I’m hoping for the best, but it’s hard to see a recovery taking shape without at least some healthier big banks.