The Condition of the US Banking System
Donald L. Kohn, Vice Chairman of the Federal Reserve, testified at a hearing of the Senate Banking Committee today about the condition of the US banking system. With respect to credit cards, Kohn commented: "the bankruptcy rate rose modestly over the first nine months of 2007 and could be a harbinger of increasing delinquency rates on other consumer loans. In view of this risk, Federal Reserve supervisors are monitoring these consumer loan segments for signs of spillover from residential mortgage problems, particularly in regions showing homeowner distress, and are paying particular attention to the securitization market for credit card loans."
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