3 Reasons Why the Outlook for Banks Is Better Than You Think

Bank earnings have been hurt by a number of factors, particularly 0% interest rates and large credit-loss provisions to cover the potential for a higher-than-expected rate of defaults, and overall credit risk. With the ongoing recession and an interest rate environment expected to stay in the 0% range for the foreseeable future, the outlook for banks does not seem great. In its first-quarter report on the banking industry, the Federal Deposit Insurance Corp. (FDIC) noted that the industry saw a 70% drop in earnings compared to the previous year's quarter.