The financial crisis has passed in the sense that the sheer panic is gone. The structural issues remain, though.
Today’s chart is a wonky way of gauging banking industry health, based on a data series collected by the Fed. It shows the percentage of assets held at banks whose allowance for loan losses exceeds their total non-performing loans — a key sign of health. In other words, the vast majority of banking sector assets — over 80% — are currently in institutions where loan loss allowances (ALLL) are below total non-performing loans.
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