The logic of risk and return in a competitive marketplace, as measured by return on economic capital that is founded in empirical analysis, has provided both sides with a common language and set of standards.
In other words, inflection points in asset quality do not signal a turning point in the economic cycle. Applying this experience to the current situation, there is no reason to believe that a modest near-term cyclical increase in problem assets or charge-offs portends ill for the continuing economic recovery.