Are prime consumers the next big worry for banks?

Wed, 14 May 2008 06:59:56 -0400

We've spoken ad nauseum about the risks of subprime debts that have filtered through the financial system in many surprising ways. But a lot of prime borrowers have been silently struggling through this economic slowdown. Now there are signs that home equity credits will come under heavy pressure. Bank of America president of global consumer and small business banking, Liam McGee, said that consumers and small businesses are under pressure, according to the AP. The bank now expects losses in its home equity portfolio to increase soon. Projected losses will be higher than expected. Other banks are likely in the same boat. There's a whole host of consumer credit that also might be problematic--auto loans, for example.

For more:
- here's the AP article

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