American banker has given 2010 out look for U.S Banking industry that the banking industry may be on the improved, heavy-handed regulation and more pain in the housing market, and other things could hinder its recovery. Here are few major themes:
According to market analysts, potential new consumer rights laws could cut the profits due to forcing to provide low rate basic banking products, more low fee to poor people and middle-class people. The traditional retail, branch bank systems could be impacted by this kind of social policy lending. By these it does get liquidity, but it may cost too much.
Losses in the banking industry:
Market analysts said that the banks could face $500 billion to $ 1 trillion more in mortgage losses. If government assistance program is extended, it will lead to more bank regulatory restrictions with more capital and higher prudential liquidity levels.
How many banks fail:
Market analysts said that in the next 2 years, they are expecting 600 to 1200 banks to fail. Government stress test was passed by large banks and are well positioned to handle the lagging phases of the recession. Many community banks are still vulnerable to economic problems and real estate.