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This lesson is a part of the course Credit Risk Management
The FDIC reported in the first quarter of 2011 that provision for loan losses fell less than half compared to the previous year. It reports that provisions for loan losses fell to $20.7 billion in the first quarter from $51.6 billion a year earlier. This marks the sixth quarter in a row that loss provisions have had a year-over-year decline. It is the smallest quarterly loss provision for the industry since third quarter 2007. The largest reductions in provisions occurred at credit card lenders that made sizable additions to their loan-loss reserves a year ago, but almost half of all institutions (48.9 percent) reported lower provisions. Less than a third (32.6 percent) increased their provisions from year-earlier levels.
