US banks face questions over bad oil loans

Resilience of hard-hit regional lenders scrutinised as losses mount

oil drilling

With the crash in crude oil prices over the past 18 months, US banks that were once enthusiastic backers of North American oil producers are faced with mounting losses on bad energy loans. As defaults in the exploration and production (E&P) sector rise, lending practices have come under scrutiny, and some critics are charging that credit was far too loose during the go-go days of the shale boom.

"This was a classic bubble," says Adam Hoffman, founder of Wooded Park Strategies, an energy risk man

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