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Friday, October 25, 2013


Fed Said to Issue Warning About Lax Loan Underwriting Practices

The Federal Reserve and the Office of the Comptroller of the Currency are recommending lenders bolster underwriting standards for leveraged corporate loans as borrowing of the high-risk debt nears levels not seen since before the financial crisis, according to sources who asked not to be identified because the actions have not been made public. The regulators sent letters to some of the largest banks -- including Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co., and others -- asking them to avoid originating loans that can be considered "criticized," or debt classified as having some flaw that may result in a loss.

From "Fed Said to Issue Warning About Lax Loan Underwriting Practices"
Bloomberg (10/24/13) Huanss, Kristen

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