Mounting NPAs in US banks

Floyd Norris points to statistics released by the Federal Deposit Insurance Corporation (FDIC), which reveals that the overall loan quality at American banks is the worst in at least a quarter century, and it is deteriorating at the fastest pace ever. Of the entire book of loans and leases at all banks — totaling $7.7 trillion at the end of March — 7.75% were showing some sign of distress, up from 6.9% at end of 2008 and from 4.1% a year earlier. The report also highlights attention on the increasing troubles of smaller and mid-sized banks, weighed down by the souring commercial real estate loans and mounting losses, exacerbated by the difficulty in accessing credit.