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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Ahda who wrote (2604)	9/22/2000 9:53:15 PM
From: Thomas M.	of 3536

Private debt is too accepted here and will become a problem for the banking industry i believe as time goes on . You mean like this? -g- (from the Prudent Bear) <<< Yesterday, the FDIC reported that bank profits had declined to $14.7 billion during the second quarter, a 25% decline from the first quarter’s $19.5 billion and the weakest profits since 1997’s second quarter. And for the first time since 1993, the banking industry’s return on assets sank below 1%. Net interest margin contracted to the lowest level since 1990. The Washington Post quoted FDIC Chairman Donna Tanoue: “For the past several months the FDIC has been saying that yellow caution lights are flashing. This report shows they are flashing brighter.” Ms. Tanoue was also quoted as saying “the earnings problems experience by a few large banks reflect a rising trend in the riskiness of assets that the banking industry holds.” Also this week, federal bank regulators increased to $100 billion, or 5.1%, the percentage of problem syndicated bank loans. This is a dramatic increase from last year’s $69 billion, or 3.8%. Bloomberg quoted David Gibbons, deputy comptroller for credit risk as stating, “these are big increases. They are, I believe, big dollars….risk is increasing in the existing portfolios. The numbers confirm that the risk has been there and is rising since 1997.” The annual “shared national credit review” showed continued rising risk while lending standards eased. >>>

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