The Fed sounded the alarm on energy extraction loans in a report this week, a joint release with the FDIC and O.C.C. Often oil and gas projects are too heavily bank-financed with too little collateral. Banks are likely to suffer billions of dollars in losses on such loans unless oil and gas prices recover to the levels of 2013 by next year. On a more positive note, the Fed report found that most banks are taking on more realistic underwriting guidelines for energy extraction loans, so the loan losses from oil and gas will not be as large as they might have been a year or two ago.
Arrested: In Belize, the Mexican marketing chief for Allen Stanford’s Ponzi scheme. He is expected to be extradited to Mexico.
Cost-cutting: Standard Chartered Bank will cut 15,000 jobs within the next three years after posting a larger-than-expected loss. It plans to raise $5 billion in a stock issue, up from a $4 billion plan previously reported. Standard Chartered has struggled to get back on its feet as it distances itself from its past money-laundering activities.