I believe the flexibility and dynamism of our banking system contributes to the financial soundness and performance of U.S. banks. The banking industry continues to be strong and profitable despite a tepid economy and corporate governance issues. After a record year in 2002, insured commercial banks in the United States earned $ billion in the first quarter of 2003 - a quarterly record.
On plausible assumptions, the deposit needed by first-home owners may now be around one and a quarter years’ income, almost twice what it was 15 years ago. At one stage, lenders were responding to this by lowering the deposit requirement, but this carried the risk of buyers subsequently getting into difficulty.