US Banks Face Billions in Losses as Lending Drops and Borrowing Increases: Report

US banks, including JPMorgan Chase and Capital One, have collectively suffered losses of $18.9 billion in the second quarter of this year due to soured loans caused by soaring interest rates. The banks are experiencing higher rates of charge-offs, or losses on loans deemed unrecoverable, compared to previous months and years. Capital One's CEO attributes the losses to the end of an unprecedented credit environment that favored borrowers. Moody's has also downgraded ratings for several regional banks and is considering further downgrades due to potential deposit flight and declining profitability. Banks are preparing for continued loan losses and have set aside $21.5 billion in contingency funds.