Officials are pressuring some of the 19 stress-tested U.S. banks to increase their capital reserves, sources say. The pressure comes as the government strives to improve the public image of the banking sector and as regulators aim to repair the balance sheets of the banks. Analysts say the banks in need of capital are probably regional banks with exposure to problematic commercial real estate.
A shareholders' meeting on June 2 marks the last step toward the German government's goal of assuming full control of Hypo Real Estate Holding AG. If shareholders approve the single final action necessary, the government will take control of Hypo and restructure it to save it from insolvency.
A brisk trade is starting to develop in the marketing of distressed bank loans secured by commercial properties, land and single-family houses, on the Internet. Kingsley Greenland, the president of one of the leading online marketers of distressed loans, DebtX, said that suddenly "it's in vogue to want to buy distressed assets."
The bankruptcy filing of General Growth Properties aroused fears, among some people, of a catastrophic collapse of commercial real estate. However, analysts say GGP's fall doesn't mean that other REITs will end up in Chapter 11 bankruptcy protection.
The swine flu epidemics reported over the weekend are expected to deal another blow to the travel industry. Many tour operators are canceling trips to Mexico, and U.S. hotel operators are worried a further spread could hurt their business. U.S. hotel occupancy was 55.2% in March, down from 62.5% a year ago.