Tuesday, December 04, 2007

US Banks: Stronger Than At Any Time in History?

The top chart above is the ratio of all nonperforming loans to total loans, at all U.S. commercial banks, from 1988-2007 (third quarter). The bottom chart is the ratio of nonperforming commercial loans to total loans during the same period.

Both graphs reflect the relative health of the U.S. banking system through the third quarter of this year. Compared to the early and mid-1990s, nonperforming loans (total) are 3-4 times lower today, and nonperforming commercial loans are 7-8 times lower today. Considering also that only 3 commercial banks in have failed during the last three years, out of about 8,500 banks, the commercial banking system in the U.S. has probably never been stronger at any point in American history than today.


At 12/05/2007 8:54 AM, Anonymous Anonymous said...

“What we are witnessing,” says Bill Gross of the bond manager Pimco, “is essentially the breakdown of our modern-day banking system


Hardly the kind of stuff that inspires confidence in the banks or the economy.


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