Don't be deceived by what looks like a relatively benign set of third-quarter earnings from U.S. banks. Granted, there was a distinct lack of nasty surprises. And some of the headline numbers looked pretty good. But the industry has a long way to go before it gets out of the woods.

Many banks pointed out a slowing pace of defaults. That's certainly encouraging for shareholders. But it's not necessarily a sign that the economy is on the upswing: banks have tightened their lending standards, so delinquencies ought to drop. And few bank bosses expect loss rates to actually improve until well into next year.

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