Stress-Tested Banks May Struggle as Bad Assets Triple
Bloomberg reports: U.S. banks that get preliminary results today of government stress tests may struggle to raise money after bad assets at the biggest lenders almost tripled on average in the past year.
The tests on the 19 largest banks are likely to focus in part on loan quality as a measure of health. The lenders, which may need to raise $1 trillion in capital to cushion losses according to an April 23 KBW Inc. report, may have a hard time persuading investors to give them cash.
Commercial loans in default or foreclosure leaped 43% in the Q1, from $46 billion at year-end to nearly $66 billion, according to research firm Real Capital Analytics Inc. Property values have fallen at least 30% since their peak in 2007.
View the full article on Bloomberg: Stress-Tested Banks May Struggle as Bad Assets Triple
Posted by: Nina Turner