Chart 4
Rising Loan Losses Reflect a Gradual
Shift to Higher Credit Risk in Banking
(FDIC-Insured Commercial Banks)

Year Annual Net Charge-offs
as a Percent of Average Total Assets
1950 0.06
1951 0.06
1952 0.06
1953 0.09
1954 0.06
1955 0.06
1956 0.11
1957 0.08
1958 0.06
1959 0.05
1960 0.18
1961 0.15
1962 0.12
1963 0.16
1964 0.15
1965 0.17
1966 0.19
1967 0.19
1968 0.16
1969 0.18
1970 0.34
1971 0.35
1972 0.25
1973 0.27
1974 0.40
1975 0.64
1976 0.67
1977 0.48
1978 0.34
1979 0.28
1980 0.36
1981 0.34
1982 0.55
1983 0.66
1984 0.76
1985 0.83
1986 0.97
1987 0.91
1988 0.98
1989 1.14
1990 1.42
1991 1.57
1992 1.25
1993 0.83
1994 0.50
1995 0.49
1996 0.57
1997 0.63
1998 0.67
1999 0.60
2000 0.68
2001 0.95

Source: FDIC Historical Statistics on Banking