"ViewPoint" examines banking challenges

With 36 percent of Southeast banks reporting losses in the third quarter, the banking industry in the region is clearly still working through difficulties, said Michael Johnson, head of the Atlanta Fed's Supervision and Regulation Division. On the plus side, these numbers represent a definite improvement over the previous quarter and year-ago levels, he added.

Johnson discussed the stubborn challenges facing the region's banks in the fourth-quarter edition of "ViewPoint," a quarterly feature in Financial Update. As 2011 approaches, he expressed cautious optimism about the outlook for District banks, noting that "while I expect we will continue to see an elevated level of problem banks, and bank failures, in 2011, I think we will also see continued stabilization and even improvement as the sheer volume of problem assets work their way through the pipeline."

There remain risks on the horizon, he added, including the recent foreclosure issues plaguing the industry. This edition of "ViewPoint" offers links to a number of helpful sources for understanding the complex mortgage situation, including a presentation by Madeleine Marsden and Robert Canova, two analysts in the Atlanta Fed's Supervision and Regulation Division, as well as a recent speech on the topic by Federal Reserve Governor Sarah Bloom Raskin.

Also included in "ViewPoint" is "Snapshot of the District," an overview of banks' quarterly call report data. Check out the December issue of Financial Update for more information about the issues and developments affecting the region's banking industry.