Troubled US bank loans hit record high

Overall loan quality at American banks is the worst in at least a quarter century,and the quality of loans is deteriorating at the fastest pace ever,according to statistics released this week by the Federal Deposit Insurance Corporation.

The report highlighted that even as the government and major banks have scrambled to deal with the impaired securities the banks own,the institutions have been plagued by an unprecedented volume of old-fashioned loans going bad. Of the entire book of loans and leases at all banks totaling 7.7 trillion at the end of March 7.75 per cent were showing some sign of distress,the FDIC reported. That was up from 6.9 per cent at the end of 2008 and from 4.1 per cent a year earlier.