Regulators say banking-industry turmoil likely to continue

Most of the damage that banks have suffered through the housing crisis has been related to homeowners' defaulting on their loans, but now the industry is facing new challenges as loans to home builders are on shaky ground. The situation has prompted federal regulators to predict continued turmoil in the banking sector. "As long as the housing market is on a downward path, as long as those prices continue to fall, I think there's a risk that the losses could continue to mount on a variety of loans," Federal Reserve Vice Chairman Donald Kohn told the Senate Banking Committee.

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