US banks set aside a record $37.1bn to cover losses on real estate loans and other credits in the first quarter in a sign of the growing impact of the global credit crisis, regulators said Thursday. Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, warned that loan-loss provisions and bank failures could rise in coming quarters as the fallout from market turmoil hit the real economy. She spoke as the FDIC released its quarterly banking profile, which showed Q1 loan-loss provisions were more than four times higher than last year’s level. That was the main reason bank earnings fell 46% to $19.3bn in the quarter from Q1 2007 for the commercial banks and savings institutions where the FDIC insures customer deposits.

This entry was posted by Gwen Robinson on Friday, May 30th, 2008 at 5:23 and is filed under Capital markets. Edit this entry.