Banking is better but still faces challenges
Stability in the banking system has improved since last year, but banks “continue to face significant challenges,” according to Senate testimony from Federal Reserve Governor Daniel K. Tarullo. Those challenges include weak credit demand from creditworthy borrowers, risks of “sizable additional credit losses,” and vulnerability to deteriorating CRE loans. Tarullo said that 96 percent of community and small regional banks were well capitalized, although weak earnings led to modest declines in average capital ratios over the last year. Nonperforming assets at those institutions rose . . .
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