When you're massively successful yet fiercely private; when a mysterious crash triggers a media frenzy that lands you on the cover of every newspaper and magazine in the country; when your behavior, which had been assumed to be beyond reproach, is revealed as reckless and tawdry; when the money that once came so easily is now running fast in the other direction — what's your next move?
That's the question that confronts banks today, and it is one that defies simple answers. Certainly the path back to respectability will vary depending on how large a bank is and what its core markets happen to be. And, despite the animus that has been deservedly heaped upon this woeful sector, it is clear that not all banks can or should be painted with the same brush.
To find out how banks are faring, we went straight to the source. Our cover story ("Brighter Days") profiles five bank CFOs at institutions large and small, TARP-funded and not, profitable or still working their way toward black ink. Some, like Wells Fargo, played a pivotal role in the post–Lehman Brothers crisis. Others learned the hard way that the easy money of the mortgage business would exact a terrible price. Some embraced the virtues of diversification, while others gained a new appreciation for a more-limited focus. Collectively, their stories shed considerable light on the improving health of the banking sector, which comes as good news for all CFOs.
As central as banks may be to the economy, however, companies' fortunes hinge on a panoply of macro factors, from an improving employment picture and its impact on consumer demand to new regulations that may or may not usher forth from Washington. Will we see a recovery this year, and if so will it be the robust kind often described as a V, the more modest U, the dreaded double-dip of the W, or something else altogether? In "The Shape of Things to Come" we hear from eight top economists. They offer not only their best guesses about the prospects for recovery, but also advice for CFOs on what and what not to do now.