Source: FDIC
Changes in the U.S. economy during the current, record-long expansion may be increasing financial and market risks for the banking industry, according to
In the second quarter edition of the Regional Outlook, FDIC analysts describe how "New Economy" trends, which may produce longer expansions, also introduce the possibility of more severe recessions. The report notes that while the consensus economic outlook remains positive, financial imbalances are developing that could magnify the severity of any economic slowdown.
"The extraordinary duration of this economic expansion has been a tremendous boon to banks and thrifts," said FDIC Chairman Donna Tanoue.
"There are indications, however, that banking risks associated with the U.S. business cycle may actually be increasing, making tomorrow's challenges much different from those of the recent past. Yellow-caution lights are flashing." [
The FDIC's report in Adobe Acrobat (PDF) format:
