Looking for Mister Clean

摘要

By lowering the U.S. federal funds rate almost a full percentage point so far this year, Alan Greenspan has made bank stocks popular again. In general, declining interest rates are a boon to a bank's earnings because rates on loans don't fall as fast as rates on deposits. The bad news: During the past few years balance sheets have deteriorated for some banks. In order to prop up earnings, these banks have been too slow to write off delinquent loans and have kept reserves against future bad loans too low.