Phase 2 of the banking crisis continues to circle. We already know about the sovereign risk issues in Europe and now the soft employment and economy in the US is showing as deteriorating consumer credit signals warning of more bad debts for US Banks.
Improvement in US mortgage delinquencies ends
Citi cut bad loan reserves, but said that was due to improvement on credit cards rather than mortgages. “We haven’t been releasing reserves against the US residential mortgage portfolio,” said Mr Gerspach. “I would look at that as still being the most significant risk that any US bank currently faces.”
Bankwatch 