The Bank of Boston has begun a new policy in banking circles. It has written-off as uncollectible loans to Third World countries. The Bank of Boston, a regional bank, has an advantage over money- centered banks like those in New York, Chicago and San Francisco. In the United States, where most money is made by banks, it can be difficult for them to write down bad loans. The inhibiting factor for regional banks is once you have been burned by the need to write-off a loan, you are much less likely to join any new such effort. Other regional banks may follow Bank of Boston's lead.
The Bank of Boston has begun a new policy in banking circles. It has written-off as uncollectible loans to Third World countries. The Bank of Boston, a regional bank, has an advantage over money- centered banks like those in New York, Chicago and San Francisco. Bank of Boston has a large loan-loss reserve that the large banks lack. The inhibiting factor for regional banks is once you have been burned by the need to write-off a loan, you are much less likely to join any new such effort. Other regional banks may follow Bank of Boston's lead.