Falling interest rates have produced a little-noticed bonanza for banks bogged down with troubled loans.

So far, most of the attention has focused on how declining rates have boosted interest income. And indeed, the wider spread between what banks are paid in interest and what they pay out is the primary cause of near-record net interest margins.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.