When you can’t repay a bank loan, that’s distressing — but probably not for the bank.
But when tens of thousands of people, who had good credit ratings, can’t, it raises concerns about the health of the economy.
And when it’s companies defaulting on very big loans, leading to charges — that is, money the bank writes off as a loss because it has given up on recovering it — and bankruptcies, it’s time for everyone to put on their detective hats.
Both First Brands, an auto parts manufacturer, and car dealership Tricolor Holdings filed for bankruptcy in September. Major banks such as Jefferies , UBS and JPMorgan had exposure to either of the two companies.
CNBC Daily Open: Bad loans by regional banks should concern us all
