Economist Jim Johannes of the University of Wisconsin, Madison, painted a bleak economic outlook in his address to bankers at the WBA's Executives' Conference in Milwaukee on Feb. 9. Johannes said the country's regulatory and fiscal policy make it difficult for him to be optimistic. Johannes said banking industry regulators need to: 1. Set clear goals that are realistic, feasible and credible as to what the policy can and cannot do. 2. Make a credible commitment to conducting policy in a systematic way even when it seems expethent to do otherwise. Johannes said goals are not clear, given that examiners discourage lending while politicians encourage it. Johannes said it also is a mistake to put too much judgment in the hands of regulators with respect to credit allocation. He said we need more market discipline, not more market regulation.