Banks routinely lose money based on loans that eventually default. Per the Federal Reserve, at the height of the financial crisis in 2009-2010, the amount lost approached 500 billion U.S dollars. More recently, losses each quarter tend to approach 150 billion. Delinquency rates tend to be around 1.5% most recently. Because of this, it is vitally important for banks to ensure that they keep their delinquencies as low as possible.

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