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Bank Industry Risk Analysis: U.S. Banks Struggle Against Worsening Credit And Economic Conditions Jan 09
Standard & Poors, Jan 2009
Abstract
Capital is adequate, although somewhat below recent historical levels Insured core deposits provide a relatively stable source of funding Strong business, geographic, and product diversification A robust regulatory oversight and accounting framework Generally good liquidity for core deposit-funded institutions Notable deterioration in credit quality High exposure to troubled mortgage assets and commercial real estate (CRE) Intense competition across the industry Cyclically low profitability The U.S. banking system has entered an exceptionally difficult time as it confronts a prolonged downturn in the credit market and the economy. Since the second half of 2007, the industry has experienced widespread credit deterioration, which along with the weakening economy and illiquid credit markets has contributed to a notable rise in bank failures after several...
Companies mentioned in this report are: Bank of America Corp.,Wells Fargo & Co.,United States of America (Unsolicited Ratings),Morgan Stanley,JPMorgan Chase & Co.,Citigroup Inc.,The Goldman Sachs Group Inc.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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