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Risk facing U.S. commercial banks

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  • Prywes, Menahem

Abstract

The study examines the financial state of the U.S. commercial banks and of the main private borrowing sectors: corporate non-financial business and households. The study finds that the condition of the banks'loan portfolios exposes them to high losses. This risk together with the forthcoming increase of the required ratio of capital to assets suggests that banks will respond by slowing the growth of credit. One consequence would be weaker U.S. investment and consumption. Moreover, credit would probably be directed away from higher risk borrowers such as the highly indebted countries.

Suggested Citation

  • Prywes, Menahem, 1990. "Risk facing U.S. commercial banks," Policy Research Working Paper Series 534, The World Bank.
    • Handle: RePEc:wbk:wbrwps:534
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    References listed on IDEAS

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