2009-05-09yahoo.com

Some banks reduced the amount of money they set aside to cover loan losses, which some analysts say conflicts with the reality of deteriorating loan portfolios. That means if the economy doesn't recover and troubled assets continue to rise, in coming quarters banks might have to boost loss reserves again -- which could hurt future earnings.

Wells Fargo saw its non-performing assets as a percentage of total assets jump by 40 percent over the previous quarter, yet it only increased its reserves by 5 percent. So even though more of its loans are past due or face foreclosure, it isn't setting aside significantly more cash to deal with potential losses.



Comments:

tvsterling at 19:21 2009-05-10 said:
Mark to market is now mark to fairy tale. Tricky bookkeeping can be fixed by trickier bookkeeping. Too big to fail is being replaced by too big for God himself to even question. Doublethinks galore. Losses are gains, write-offs are earnings, down is up & Darth Vader is really Yoda. The public is supposed to buy all this, LITERALLY ( with our tax dollars). Permalink

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