Reuters reported, citing sources familiar with the review, U.S. regulators are scrutinizing the impact of falling energy prices on bank loans in a move that could make it more difficult for lenders to extend extra credit to troubled oil and gas companies.
Reuters noted that regulators met with lenders last week to discuss the impact of falling commodity prices on outstanding loans as part of the review.
Reuters said if regulators decide certain loans need to be marked as troubled, banks will have to set aside more capital to cover the higher risk of default, making it less profitable for them to lend more to indebted energy firms.
Access the full report from Reuters here.
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