Banks Warned Against Lowering Reserves To Boost Profits

Law360, New York (October 29, 2012, 5:32 PM EDT) -- U.S. regulators are keeping a close eye on banks’ loan loss reserves, a key tool for protecting against bad loans, and will take action against banks that lower them in order to increase profits, a top official said Monday.

Comptroller of the Currency Thomas Curry said at a meeting of the Risk Management Association in Dallas that several national banks and thrifts had been lowering their loan loss reserves in the third quarter of 2012 despite still-elevated risk levels in their loan portfolios, especially in commercial...
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