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Watchdog says bad assets still threaten banks Bad assets still threaten bank stability, congressional watchdog says By Daniel Wagner, AP Business Writer On Tuesday August 11, 2009, 12:07 am EDT WASHINGTON (AP) -- Despite signs that the financial system has stabilized, banks remain threatened by billions of dollars of bad loans on their balance sheets, and more could fail if the economy worsens, a congressional watchdog reports. In its latest assessment of the $700 billion financial system bailout, the Congressional Oversight Panel warns that banks still hold many risky loans of uncertain value. If unemployment rises sharply or the commercial...

Bank Chief Seeks to Rein In Risky DealsAs the real estate market slows, some mortgage lenders are trying to prop up profits by relaxing lending standards for certain types of loans, endangering borrowers and financial institutions, a top banking regulator said yesterday. Speaking to the New York Bankers Association, John M. Reich, director of the Office of Thrift Supervision, warned that some lenders are making it too easy for unsophisticated borrowers to take on risky nontraditional mortgages that they may not fully understand. * * * But a regulatory crackdown on the loans, known as interest-only and option mortgages, could...