Introduction: The Uncertain Future of U.S. Banking

Abstract

The U.S. banking industry has seen better days. Questions being asked in mid-1990 about the long-term prospects of U.S. banks are unlike any queries raised since the 1930s. In the spring of 1990, Citicorp, parent company of the nation’s largest bank, had its credit rating downgraded by Standard & Poor’s and Moody’s as a result of concern about real estate losses at Citibank. In fact, no U.S. bank’s debt is rated Aaa, and problems with real estate loans, thought at first to be concentrated primarily in New England, now appear to be much more widespread.