Achievement of these goals was considered by the HRC as very challenging, even aggressive, given the expected
modest economic growth for 2007 for the financial services industry, the impact and duration of the on - going flat / inverted yield curve (meaning short - term interest rates that are virtually equal to or exceed long - term interest rates, thus lowering profit margins for financial services companies that borrow cash at short - term rates and lend at long - term rates), potentially higher credit losses, fewer available high -
quality, high - yielding
loans and investment opportunities, and a consumer shift from non-interest to interest - bearing deposits.
The toxic securitized mortgage assets were not in the Main Street banks and savings and
loans; these institutions owned mostly prime
quality whole
loans and could have bled down the
modest bad debt they did have over time from enhanced
loan loss reserves.