The Federal Deposit Insurance Corporation, which insures bank deposits, said Wednesday it is closely monitoring credit markets and the biggest U.S. banks' balance sheets as troubled real estate loans rose 36 percent in the quarter ended June 30.
"We remain vigilant," FDIC Chairman Sheila Bair said at a news conference on U.S. banks' second-quarter rise in noncurrent real estate loans. "We are closely monitoring the situation in the markets as well as individual institutions."
U.S. banks' non-current real estate loans rose for the fifth consecutive quarter to a total $66.9 billion at the end of the second quarter, the FDIC said. That was up 36 percent from one year ago and up 10.6 percent from the end of the first quarter, the FDIC said.
Rising U.S. home foreclosures and problems in the subprime mortgage market have spilled into broader financial markets in recent weeks.
Bair said the "tremendous golden age of banking" for U.S. financial institutions had ended, at least temporarily.
"Everybody is being challenged in this current environment," she said.
U.S. banks saw second-quarter earnings fall 3.4 percent to $36.7 billion from $38 billion in the year-ago period. Non-current home mortgage loans -- those overdue by 90 days or more -- totaled $27.5 billion at the end of the second quarter. That was up 47 percent from one year ago and up 12.6 percent from the end of the first quarter, the FDIC said.