Few banks do business with scrutinized firms

Northwestern Financial Review, Sep 15-Sep 30, 2002

Few commercial banks had lending tied up with firms that are now under scrutiny for questionable accounting, a Federal Reserve survey has found. "Most banks reported that they had very little exposure to firms that had been the target of investigations into their accounting practices," the Fed said in a survey of bankers.

Eighty percent of surveyed banks reported having less than 1 percent or none of its outstanding business loans to such firms. The Fed did not name specific companies but instead asked about loans to companies that were subject to civil or criminal investigations relating to their accounting practices.