Monday, July 20, 2009

Moody's: Inadequate Loan Loss Provisions for Banks

by Calculated Risk on 7/20/2009 02:28:00 PM

From Bloomberg: Banks Fail to Make Adequate Loan-Loss Provisions, Moody’s Says (ht Brian, Bob_in_MA)

Banks have failed to make adequate provision for the losses on loans and securities they face before the end of next year ... U.S. banks may incur about $470 billion of losses and writedowns by the end of 2010, which may cause the banks to be unprofitable in the period ...

“Large loan losses have yet to be recognized in the banking system,” Moody’s said. “We expect to see rising provisioning needs well into 2010.”
This can't just be regional and community banks - this must include some of the stress test 19. Maybe it is time for another round of stress tests.