Charge-Off Rate on All Loans, All Commercial Banks
CORALACBN • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
0.64
Year-over-Year Change
190.91%
Date Range
1/1/1985 - 1/1/2025
Summary
The Charge-Off Rate on All Loans, All Commercial Banks measures the percentage of loans that banks have determined are unlikely to be collected. This metric is a critical indicator of credit quality and overall economic health, reflecting banks' lending risks and potential financial stress.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
This economic indicator tracks the proportion of loans that commercial banks have written off as uncollectible, representing a key measure of credit performance across the banking system. Economists and financial analysts use this trend to assess credit risk, banking sector stability, and potential economic downturns.
Methodology
The rate is calculated by dividing the total value of charged-off loans by the total outstanding loan portfolio, typically reported quarterly by commercial banks.
Historical Context
Policymakers and financial regulators use this data to monitor banking system health, inform monetary policy decisions, and assess potential systemic risks.
Key Facts
- Charge-off rates typically increase during economic recessions
- Higher rates indicate increased lending risk and potential financial stress
- The metric covers all types of loans across commercial banking institutions
FAQs
Q: What does a charge-off rate indicate?
A: A charge-off rate reflects the percentage of loans a bank considers unlikely to be collected, serving as a key indicator of credit risk and banking sector health.
Q: How do charge-off rates impact the economy?
A: Rising charge-off rates can signal economic stress, potentially leading to tighter lending standards and reduced credit availability.
Q: How often is this data updated?
A: The charge-off rate is typically reported quarterly by the Federal Reserve as part of its comprehensive banking system analysis.
Q: What causes charge-off rates to increase?
A: Economic downturns, high unemployment, industry-specific challenges, and increased financial stress can cause charge-off rates to rise.
Q: How do banks determine a loan is uncollectible?
A: Banks typically charge off loans after a prolonged period of non-payment, usually 120-180 days, when they determine collection is unlikely.
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Citation
U.S. Federal Reserve, Charge-Off Rate on All Loans, All Commercial Banks [CORALACBN], retrieved from FRED.
Last Checked: 8/1/2025