Banks Writing Off Bad Loans At A Record Pace

The credit crisis is showing no signs of dissipating. That despite trillions of dollars of intervention to try to loosen up credit and restart lending.

There's a fundamental lack of trust in the economy. Debt-securities are selling at low rates. Until that changes, until there's trust once again in our financial system, there can't be sustained economic growth.

Meanwhile, we keep paying a stiff price for our easy money binge earlier this decade.

The Washington Post reports:

The charge-off totals cover banks rated by Moody's with more than $50 billion in assets. Moody's-rated banks hold 85 percent of the total assets in the U.S. banking system.

Bad loans resulting from the global credit crisis have battered banks' profits and triggered an upsurge in the number of troubled and failed banks. Banks that took major write-downs on residential mortgages during the housing slump are now suffering losses from commercial real estate and business loans as well.

The high costs of credit problems weighed heavily on banks' third-quarter results, Moody's said.

"For most banks, third-quarter earnings were at best modest, and in many cases they recorded sizable losses," Moody's said.