US bank failures could rise above âhistorical normsâ as a weakening economy puts pressure on badly underwritten loans, particularly in commercial real estate, according to John Dugan, who oversees about 1,700 national banks as comptroller of the currency. His comments, in an FT interview, come as US banks report big spikes in reserves for expected losses on consumer and small business loans, reflecting the spread of the credit crisis from Wall Street to the broader economy. On Tuesday, Atlanta-based SunTrust said Q1 profit nearly halved to $283.6m as provisions rose 10-fold to $560m. Ohioâs Fifth Third bank said profits fell 19% to $292m as provisions rose to $544m from $84m last year. http://ftalphaville.ft.com/blog/2008/04/23/12509/regulator-warns-on-wave-of-bank-failures/ What, no reversion to the mean ???
The historical norm they are referring to might be a short-term, best-case-scenario, extreme. The new "norm" will be at a worse level.