Asset Quality Measures, Net Charge-Offs on All Loans and Leases, All Commercial Banks
NCOALLACB • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
19,249.00
Year-over-Year Change
240.57%
Date Range
1/1/1985 - 1/1/2025
Summary
Net charge-offs represent the value of loans that banks have written off as uncollectible, minus any recoveries. This metric is a critical indicator of credit quality and banking sector health, reflecting underlying economic conditions 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
The trend measures the total value of loans deemed unrecoverable by commercial banks, serving as a key performance indicator for credit risk and lending practices. Economists and financial analysts use this data to assess the overall credit environment and potential economic vulnerabilities.
Methodology
Data is collected from quarterly reports submitted by commercial banks to regulatory authorities, tracking the total value of loans written off after determining they are unlikely to be repaid.
Historical Context
Policymakers and financial regulators use this metric to monitor banking sector stability, inform monetary policy decisions, and assess potential systemic risks.
Key Facts
- Represents the total value of loans written off by commercial banks
- Indicates potential credit quality issues in the banking sector
- Fluctuates with economic conditions and lending practices
FAQs
Q: What do net charge-offs indicate about the economy?
A: Higher net charge-offs typically suggest economic stress, such as increased unemployment or financial difficulties for borrowers. They can signal potential challenges in the credit market and overall economic health.
Q: How do net charge-offs affect banking performance?
A: Increased net charge-offs can reduce bank profitability and may lead to more conservative lending practices. They represent direct financial losses for banking institutions.
Q: How are net charge-offs calculated?
A: Net charge-offs are calculated by subtracting loan recoveries from the total value of loans written off as uncollectible during a specific period.
Q: What industries are most affected by net charge-offs?
A: Typically, industries sensitive to economic cycles like real estate, consumer credit, and small business lending experience more significant net charge-off fluctuations.
Q: How frequently is this data updated?
A: The net charge-offs data is typically updated quarterly by the Federal Reserve, providing a current snapshot of banking sector credit quality.
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Citation
U.S. Federal Reserve, Asset Quality Measures, Net Charge-Offs on All Loans and Leases, All Commercial Banks [NCOALLACB], retrieved from FRED.
Last Checked: 8/1/2025