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Do Strong Bank Credit Results Suggest Trouble Ahead? 

October 27, 2015

Christopher Whalen, American Banker

The late Yogi Berra once famously said, “It’s déjà vu all over again.” The expression is apt for today’s financial sector.

The zero or low default rates being reported by banks may on the face be a good sign. But they in fact suggest mounting future credit risk, based on our most recent review of aggregate financial statement and portfolio data published by the FDIC. Credit does have a cost, so when U.S. financial institutions publish data that suggests otherwise we believe that investors and regulators need to beware.

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