Monday, January 25, 2010

Fewer Defaults: Could the Worst Be Over?

The number of consumer loans that are going bad is leveling off, reports Bank of America, Wells Fargo and other large banks, signaling that the worst could be over.

Bankers reported that credit quality is stabilizing with lending losses expected to peak this year.

But analysts warned that any new hit to the economy could reverse the trend with all aspects of the recovery dependent on an improving employment picture.

“In the second half of the year, it will be more and more important for the overall economy to improve at a faster clip,” says Anthony Polini, a banking analyst at Raymond James.