American Banker (08/11/08) P. 1; Dobbs, Kevin
Analysts and bankers note that the commercial and industrial (C&I) lending market, which so far has been able to sidestep the pitfalls of the subprime mortgage debacle, will serve as a critical economic gauge in this year's third quarter. Friedman, Billings, Ramsey analyst James Abbott notes that several firms have started to show signs of weakness in C&I loans, adding, "We expect this trend of deterioration to continue through the end of 2008, reflecting further weakness in regional housing markets and general economic conditions." Bank of America CFO Joe Price says his company's commercial portfolios are generally sound at the moment, but he concedes that chargeoffs rose during the last quarter and that there could be trouble ahead. Investors are also looking at the sector's future with skepticism, with bank stocks down so far this year nearly across the board.
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