By Jackie Stewart
Sep 23, 2015
The banking industry continues to sit on a mountain of problematic loans seven years after the onset of the financial crisis.
The banking industry continues to sit on a mountain of problematic loans seven years after the onset of the financial crisis.
Credit quality, to be sure, is substantially better than it was during the peak of the crisis. But the amount of nonperforming assets on banks’ books is more than triple the levels reported in 2006.
Banks have been more reluctant to offload a number of credits in bulk sales, and loss-share agreements have also forced banks to keep sour loans on their books. Low interest rates, along with a lack of better reinvestment options, have also influenced executives’ decisions.
Still, the continued existence of troubled assets could prove problematic should the banking industry face another economic downturn, industry observers warn.
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