Board on Tuesday instructed its examiners to crack down on banks with weak underwriting standards.

Unpaid and foreclosed loans at the 50 largest bank holding companies increased 13.7%, to $18.8 billion in the 18 months ending June 30, Fed officials told reporters in a conference call. While problem loans are increasing from "fairly low levels," the officials said the trend is troubling because it comes during favorable economic times.

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