Money Talk: Political uncertainty gives small businesses pause on hiring, growth plans

Editor’s note: Each Monday, Talk Business & Politics provides “Money Talk,” a wrap-up of banking and financial news.

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POLITICAL UNCERTAINTY GIVES SMALL BUSINESSES PAUSE ON HIRING, GROWTH PLANS

Small business owners’ confidence in the national economy is down, according to the spring 2016 Bank of America Small Business Owner Report, which found that only 29% of small business owners feel confident that the national economy will improve over the next year – a sharp drop from a year ago.

The report, based on a semi-annual survey of 1,000 small business owners across the country, suggests that the upcoming presidential and congressional elections are having a sizable influence on the outlook of small business owners. Sixty-seven percent believe that the upcoming presidential election will affect their business “a lot” or “somewhat,” while 53% believe congressional elections will have an impact.

Nearly four in five say they are concerned about the “effectiveness” of U.S. government leaders, which was higher than last year, but in line with previous election year results in 2012 and 2014. At the same time, concern for nearly all other economic factors, including commodities prices, interest rates and credit availability, is down, with the exception of U.S. and/or global stock market and health care costs.

To view the full report, click here.

LIFE INSURERS EXPECT TO BOOST USE OF BIG DATA, PREDICTIVE ANALYTICS

Life insurers across North America foresee a dramatic shift in their application and usage of big data and predictive analytics over the next two years, according to leading global advisory, brokering and solutions company Willis Towers Watson’s (NASDAQ: WLTW) Big Data and Predictive Analytics Survey. Survey participants were life insurance chief and senior financial officers, who said data mining continues to evolve with big changes in the future for both internal and external data collection sources.

Survey respondents indicated their companies have a lot to learn about the application and use of big data and predictive analytics, as nearly three-fifths (58%) said their organizations know only a little or understand just the basics. But nearly all insurers (92%) expect to use big data and predictive analytics in some aspect of their operations in two years. Further, only a handful (8%) expressed that they’re currently using data to inform decision making; however, over three-fifths (62%) anticipate doing so in two years.

FEDERAL RESERVE PROPOSES RULE TO ENHANCE FINANCIAL STABILITY OF GLOBAL BANKS

The Federal Reserve Board has proposed a rule to support U.S. financial stability by enhancing the resolvability of very large and complex financial firms. The proposal would require U.S. global systemically important banking institutions (GSIBs) and the U.S. operations of foreign GSIBs to amend contracts for common financial transactions to prevent the immediate cancellation of the contracts if the firm enters bankruptcy or a resolution process. This change could reduce the risk of a run on the solvent subsidiaries of a failed GSIB caused by a large number of firms terminating their financial contracts at the same time.

The proposal ensures consistency with restrictions on financial contracts under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act that support the orderly resolution of financial firms.