At least when talking to Irving Fisher, Ben Bernanke or Steve Keen.
The stock market has punished oil and gas stocks over the last year, wiping out $200 billion in combined market cap among America’s 10 largest oil and gas companies, according to FactSet Data. But equity investors aren’t the only ones licking their wounds. In a quieter corner of energy finance, another group of investors also faces high stakes: bank lenders.
Regulated banks that extend loans to oil and gas companies not only face the prospect of failing to recoup their investments in the sector – they also operate under the watchful eyes of numerous regulatory agencies.
Indeed, under the heat of regulatory pressure over the leveraged loans they provided to energy companies, a group of banks recently met with the (OCC) to request a helping hand, multiple sources told .
The meeting, held in early September, comes as the OCC, the (FDIC), and the finish their annual , which yielded tougher standards and increased scrutiny on a bank’s leverage and the amount of capital set aside to back energy loans in the event that the borrowers are unable to pay back the loan.
Banks attending the meeting to make their pitch for regulatory leniency included regional players like , as well as heavyweights like and , the sources said. The group totaled approximately 10 banks.
Regulators have been calling for banks to transfer certain energy loans to their respective workout departments where distressed assets are housed. Typically, the larger a bank’s book of distressed assets, the more capital reserves it would need under regulatory guidelines....MORE