Loan Losses Quotes

I have no interest in bailing out anybody, quite frankly, and I think banks have to suffer every dollar of loss if they make a bad loan.

Why do we have financial crises? Why do banks lose money? If history is any guide, it hasn't often been the result of speculative bets. It has been the result of banks making loans to individuals and businesses who can't pay them back.

We have to make sure that the banks pay every nickel of loan losses that they create, but we don't want to hold them responsible for withdrawals if we want the economy to recover.

In my own work, I have written about how our public sector bank officials avoid making any new lending decisions - because lending always exposes them to some (infinitesimal) risk of being blamed for the loan going wrong.

If you are in banking and lending, surprise outcomes are likely to be negative for you.

One of the risks for anybody in the lending business is that being conservative can harm your competitiveness.

With weak balance sheets, banks tend to continue lending unprofitable businesses and leave them existing.

Mortgage insurance stocks remained depressed through the end of 2012 amid lingering uncertainty as to whether they had sufficient capital to absorb losses on delinquent loans originated before the crisis. However, as house prices began to recover, losses started to decline.

If a lending institution is faced with bids for a package of toxic assets that are less than the carrying value of those assets, the sale of those assets would trigger a further loss and reduce the underlying capital of the institution.